When a small creditor originates >500 mortgages during a given year, when does that small creditor status go away, immediately or at the beginning of the next year?

Thank you.

Quick answer, not right away. The count is based on the previous year's number, I believe.

My understanding is that, if you had originated 500 closed end loans in 2013, you would no longer be a small creditor in 2014. If you reach 500 loans in June 2014, you would not drop the small creditor label until January 1, 2015.

When you (and any affiliate) originate between you the 501st covered transaction (as defined in 1026.43(b)(1)), you kill your status as a small creditor for the following calendar year. So if you reach that 501st loan today, March 5, 2014, you're out as a small creditor during 2015. If, during 2015, you and your affiliates keep the number at 500 or fewer, you will again qualify as a small creditor under that criterion (you have to pass the other criteria, too, of course), for 2016.

If you lose that small creditor status for 2015, you'll have to start escrowing for any HPMLs for which you receive applications beginning in 2015, and that will kill your chances of ever meeting the exemption criteria for HPML escrows thereafter. And, at least during 2015, you would not be able to write QMs under the provisions reserved for small creditors under 1026.43.