I don't anticipate our institution doing many HOEPA loans, but just when I think I have most everything figured out, I have more questions.

1. According to Reg Z, real estate related fees include amounts required to be paid into escrow. I have a loan in front of me in which 9 months of property tax is required in escrow. Does this have to be included in the formula for the fee trigger? If so, then wouldn't refinance loans done later in the year be more susceptible to being a HOEPA loan than ones originated at the beginning of the year (since fewer months of property taxes would be required in escrow)?

2. Since there is a 3 day ROR on refinance loans, does this mean that if the HOEPA disclosures are given at loan closing, that will meet the 3 day requirement? They're supposed to be provided 3 days before consummation of the loan. Is the loan consummated at loan closing or because the customer doesn't have access to the funds until 3 business days after closing, is the loan consummated then?

3. We have a wholly owned mortgage company subsidiary. All mortgage loans are closed in its name. We buy these for a fee (called a service release premium). The bank pays all of this, the customer pays nothing. Would this have to be included in the formula? Is it considered a broker fee? My opinion is that it wouldn't be included, because the customer is paying none of this.

Any input would be appreciated. Thanks.

1.
12 CFR §226.32 Requirements for certain closed-end home mortgages.
(1) For purposes of paragraph (a)(1)(ii) of this section, points and fees mean:
(i) All items required to be disclosed under §226.4(a) and 226.4(b), except interest or the time-price differential;
(ii) All compensation paid to mortgage brokers; and
(iii) All items required to be listed in §226.4(c)(7) (other than amounts held for future payment of taxes) unless the charge is reasonable, the creditor receives no direct or indirect compensation in connection with the charge, and the charge is not paid to an affiliate of the
creditor.

The amount put into escrow for taxes and insurance is NOT to be included in the HOEPA fees.

2. The HOEPA disclosure must be given 3 days before loan closing. For instance, provide the HOEPA disclosure on Monday, close the loan on Friday and give the RofR disclosure, advance on Wednesday at the earliest.

3. Don't know.

No. Not fun.

Here are my thoughts on the matter....

1) Concur with David, don't count escrow for taxes to be paid.
2) Consumation (1 m or 2??) is when the customer becomes legally obligated, or when they sign the note. David is again correct.
3) Believe that service release premiums are not calculated for Section 32, but may be calculated under state lending laws (for example, in Georgia) as part of any points & fees test necessary.

HTH!

ExGovtBabe: What is "HTH"?

I would speculate "Hope that helps."

Yes, exactly.

Hope
That
Helps.

Yes it did help, thanks everyone.