We have looked at several HOEPA worksheets and do not see reference anywhere to "prepaid interest." Shouldn't this also be included in the HOEPA calculation?

Prepaid interest is a prepaid finance charge and should be included in your calculation. We include it in ours by adding a "any other finance charge" line.

If by "pre-paid interest" you are referring to the interest collected from the accrual date until the first payment date, that it is not included in your calculations. That is a "time-price differential" and is excluded. (226.32(b)(1)(i))

I agree with Dan. Interest is excluded from the HOEPA Points and Fees test - whether paid up front (odd-days interest) or earned after closing. That is why you aren't seeing it on the HOEPA worksheets.

We are referring to interest collected from the accrual date until the first pyament date...so Thank you for the information. I appreciate you citing the section in the Reg, as that's exactly what I needed. I knew there was a reason that it wasn't showing on the worksheet.

Thanks again.