all of our loans are HPML

All of our loans are considered HPML, am I understanding correctly that because of this, not only are we required to give the disclosure but our borrowers are required to complete the home ownership counseling, at first I thought it was limited to negetive am loans, but that seems to apply only when talking about the Ability to repay ,so am I correct in thinking this will apply also when disclosing the fee, do I just get an estimted cost from a couple of the counselors and put tht in my GFE, and does this show in box 1 also. Also in reading the small entity guide put out by cfpb, am I understanding that we cannot finance our origination fee or points on refinance
from the guide: Points and fees cannot be financed (i.e., rolled into the loan amount). However, you can finance closing charges excluded from the definition of points and fees, such as bona fide third-party charges

All of your loans are HPMLs or HCMLs?

I can see them all being HPML's, but surely you aren't over HCML thresholds on EVERY loan you have???

We end up with all of the balloon loans that we make being HPML, but no HCML.

well I think they are, perhaps I need clarifiction of the difference on hcml and hpml

HCML=what people used to call (and i still do) a HOEPA or Sec. 32 loan.

if this is the threshold (this is what I found online)
for hcml then maybe I am getting confused, maybe we just do hpml, if so does that mean that I only need to give out the home ownership counseling list and do not have to worry about the borrower getting counseling,
our in house arm rates are 5.75% and we charge 1% origination fee

APR Thresholds


6.5% above APOR – 1st lien
8.5% above APOR – Subordinate liens
8.5% above APOR – 1st lien (if dwelling is personal property and the loan amount is less than $50K)

Yes, those are the new thresholds for High Cost Mortgage Loans (HCML)/Section 32/HOEPA loans.
The threshold for High Price Mortgage Loans (HPML)/Section 35 loans are 1.5 above the APOR for first liens, 2.5 above APOR for first lien jumbo loans, and 3.5 above APOR for subordinate liens.

Most likely you are issuing HPMLs, not HCMLs. The counseling is only required for HCMLs, but remember you have to give a local counseling list for all RESPA applications regardless of HPML/HCML status.

Just to clarify, my understanding is the counseling list must be given for Federally backed mortgages - so if I portfolio the loan technically I dont have to even provide the list - right?

I do still think we'll provide the list just to be safe though.

Nope.

All Federally "related" Mortgage loans :read RESPA Covered:

AGree with dblack.

I'm unsure about what this part of the new HCM rules is referring to: "8.5% above APOR – 1st lien (if dwelling is personal property and the loan amount is less than $50K)." What exactly is the revised Reg. Z's use of the term "personal property" intended to include?

I'm pre-reviewing a loan to be secured only by a mobile home the borrower is purchasing to be his primary residence. The loan amount is $40,000. For the HCM APR test, is it correct that the APR cannot exceed the APOR by more than 6.5% to avoid becoming a HOEPA loan? The FFIEC rate spread calculator produced a value that was below 6.00, though I should mention that was before the lender had settled on how much of an origination fee to charge.

If you did not take the land with the MH, you get the 8.5% spread.


" I should mention that was before the lender had settled on how much of an origination fee to charge"

From a fair lending perspective, that is scary.

A mobile home only with no land is "personal property" vs land, which is "real property"

Thanks, Kathleen B, I thought that "personal property" was probably inclusive to mobile homes, but of course it is too much to expect the regulatory wording to explicitly state that in such clear terms (sarcasm intended). Had the loan amount exceeded $50,000, then the 6.5% spread would be applicable.

dblack, the paper-work I saw was not for an already-consummated loan (notice I typed "pre-review") and RESPA doesn't apply for this loan, so I could understand why the loan origination fee hadn't already been disclosed by the lender. I only added that detail to make clear that a new rate spread calculation would have to be performed once the origination fee had been added in. The lending officer is still learning the ropes, but I expect she will charge an origination fee in line with the institutional norm. If not, you are absolutely right, we'll need to have a fair lending discussion.