HPML? Term of 12 months?

One of the exclusions for a higher priced mortgage loan is "temporary or brige loan with a term of twleve months or less where the customer plans to sell a current dwelling within twelve months".

Q: If we convert a bridge loan (currently a term note) to payments, but balloon it at 11 months, does this quality for HPML? The note will continue to be secured by both homes (the one they live in now and the one they plan to sell) so is it still a bridge and therefore exempt from HMPL classification?

Q #2:What if the loan has been on the books since February 2009(two extensions). This was of course before 4/1/10, but the term of the loan in total is more than 12 months?

We just want to be sure that if we put this note on monthly payments with a balloon at 11 months, that it still qualifies as a bridge and is exempt from HPML classification. Please advise. Thanks so much!

#1. You have a one year balloon note, this would not qualify as temporary financing nor would it IMO qualify as a bridge loan.

#2. Modifications and/or extensions do not qualify as a refinancing.

Dan - why do you not beleive that #1 is no longer temp financing. Because it's a one year and a balloon?

Yes.

Once you place a loan into liquidation (require P&I payments over a set term) you take it out of its temporary status and put into short term financing.