Would someone provide me the abbreviated version of when a mortgage loan is subject to the Home Owners Equity and Protection Act disclosure requirements (Reg Z 226.32)? I understand the part about about the total points and fees and interest, but is this applicable to all mortgage loans and not just home equity loans (which is what I first thought)? Thank you.

The "equity" in HOEPA has little to do today with an equity loan product and everything to do with the equity a homeowner has. It is there to protect their equity and require reporting on certain high cost loans. As I understand it, HOEPA was originally targeted at the equity loan market and the abuses commonly associated today with predatory lending. As you noted, this is based on the coverage rules: A loan is covered by HOEPA if (1) the APR exceeds the rate for Treasury securities with a comparable maturity by more than 10 percentage points, or (2) the points and fees paid by the consumer exceed the greater of 8 percent of the loan amount or $465.

An excellent summary is in the proposal found at FR 12 CFR 12/26/00 PROPOSED 65 FR 81438 - Truth In Lending
65 FR 8143812/00[Federal Register: December 26, 2000 (Volume 65, Number 248)]

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

Andy-thank you for the reference. It was helpful.

The proposed changes to Regulation Z would make the HOEPA rules more inclusive. The changes in the triggers that Andy described would include more loans made by banks. Several examiners have run some tests and discovered that the proposed HOEPA standards would include a fairly significant number of bank loans whereas under the existing definitions most banks are not affected by HOEPA. Concerns about predatory lending may change this. Watch closely what the FRB does with this proposal. You may want to check a few loans in your portfolio against the proposed triggers.

Correct me if I am wrong, but Section 32 does not apply to purchase transactions. 226.32 (a) (2) This section does not apply to the following: (i) A residential mortgage transaction

But it would apply to a refinance or equity loan product.

So far, our prices puts us below the Section 32 bar, but I am not so sure about the proposal.

*sigh* Between HMDA and HOEPA, I have no desire to offer ANY of this type of credit. But since an existing relationship will probably want such a loan in the future, we have to keep offering it. For a product that comprises less than 3% of our portfolio, these are sure a drain on my time and resources.