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#52179 - 01/03/03 08:49 PM HMDA Final Rule Rate Spread Calculation
Ninky Offline
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Ninky
Joined: Nov 2002
Posts: 357
Has there been a change to the HMDA final rule regarding the rate spread calculation? My copy says "use the Treasury yield for a comparable period of maturity as of the 15th day of the month preceding the month in which the application for the loan was received". At a recent seminar we received this explanation: "The rate spread will always be based on the rate on the prior 15th of the month. Example: On October 30th, the rate should be compared to the October 15th Treasury Rate. For November 14th, the rate should be compared to the October 15th rate.

Which is correct? I thought HOEPA and HMDA were the same and that it is supposed to be the 15th of the month preceding the month the application was taken.

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#52180 - 01/03/03 09:06 PM Re: HMDA Final Rule Rate Spread Calculation
Dan Persfull Offline
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Dan Persfull
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Posts: 46,761
Bloomington, IN
In reply to:

Example: On October 30th, the rate should be compared to the October 15th Treasury Rate. For November 14th, the rate should be compared to the October 15th rate.



This is correct for HMDA.

203.4(12)....Treasury security with a comparable peroid of maturity (as of the 15th day of the month immediately predecing the month in which the application for the loan was received by the financial institution)......
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The opinions expressed are mine and they are not to be taken as legal advice.

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#52181 - 01/03/03 09:17 PM Re: HMDA Final Rule Rate Spread Calculation
Dan Persfull Offline
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Dan Persfull
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Posts: 46,761
Bloomington, IN
Whoa! Now that I re-read this I'm not so sure. When the proposl first came out it was to be: Example: On October 30th, the rate should be compared to the October 15th Treasury Rate. For November 14th, the rate should be compared to the October 15th rate.

But this (as of the 15th day of the month immediately predecing the month in which the application for the loan was received by the financial institution)...... reads the same as Sec. 32.

Now I'm confused Any other thoughts out there.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#52182 - 01/03/03 09:48 PM Re: HMDA Final Rule Rate Spread Calculation
Elaine K. Sheehan Offline
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Elaine  K. Sheehan
Joined: Jul 2002
Posts: 157
Grand Rapids, MI
You should look to the June 27, 2002 final rule where 203.4(12) states "the lender shall use the yeild on Treasury securities as of the 15th day of the preceding month if the rate is set between the 1st and 14th day of the month and as of the 15th day of the current month if the rate is set on or after the 15th day..."

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#52183 - 01/03/03 09:57 PM Re: HMDA Final Rule Rate Spread Calculation
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,761
Bloomington, IN
Thank you, I was looking at the 2/15/02 copy.

Thought I was loosing my mind
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The opinions expressed are mine and they are not to be taken as legal advice.

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#52184 - 01/06/03 04:41 PM Re: HMDA Final Rule Rate Spread Calculation
Jack Holzknecht Offline

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Posts: 330
Louisville, KY
This is a confusing matter. First it was consistent with HOEPA, then it was changed. Ultimately for HMDA the matter should be fairly easy. The FFIEC website will contain (but doesn't yet) a page that will show the appropriate value for a particular time period.

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