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#578810 - 07/03/06 07:53 PM ARMs Max Interest Rate
Jan94 Offline
Platinum Poster
Joined: Mar 2001
Posts: 828
I realize that there is a federal preemption of state law on first lien ARMs wherein there is no limit on the interest rate or fees we can charge. The reason I'm questioning this is because we used the Credit Card State Bank statute. It allows more favorable rates and fees on small loans. That particular statute allows a 21.00% maximum. However, we are using 24.00% as the maximum on our ARMs. Do you know whether or not we have to consistently use that same statute for different loan types - or can we use one statute for one category of loans and another statute for another category of loans (such as junior lien- ARMs)? Thank you.

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#578811 - 07/11/06 07:18 PM Re: ARMs Max Interest Rate
OnTheEdge Offline
Diamond Poster
Joined: Apr 2002
Posts: 1,677
SmallTown, USA
My understanding.... you can use different statutes for different loan categories. However, you can't "cherry pick" and use the most favorable (for lender) sections of different statutes per loan. We too use Credit Card State bank statute in 99.9% of our loans. For small single pay loans, term less than a year we still use TILT rules.
The opinions expressed are mine and do not necessarily reflect those of my employer.

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