Posted By: CSpellman
1st or Subordinate Lien? - 09/23/09 04:18 PM
For HPML purposes, if the bank uses future advance mortgages on all of its RE Loans, are subsequent loans secured by the same mortgage (in 1st position)tested under the 1st lien APOR test (1.50%) or the subordinate lien test? The scenario would be the customer purchased the residence years ago but would like to cash out on some equity. Rather than completely refinance the loan and save on closing costs, the bank does another note secured by the same lien. It's still a 1st mortgage secured loan it just happens to be the 2nd or more loan.