HPML - Bridge Loan

Posted By: mdog76

HPML - Bridge Loan - 04/11/18 01:15 PM

Just wanting to make sure a bridge loan is not subject to HPML. I see where its not required for escrow, but what I'm reading doesn't exactly say that its exempt from HMPL

Thank You.
Posted By: Adam Witmer

Re: HPML - Bridge Loan - 04/11/18 01:45 PM

1026.35 has separate exemptions for each part of the rule.

1026.35(b)(2)(C) exempts bridge loans from the escrow rules:
(C) A temporary or "bridge" loan with a loan term of twelve months or less, such as a loan to purchase a new dwelling where the consumer plans to sell a current dwelling within twelve months; or

1026.35(c)(2)(v) exempts bridge loans from the appraisal rules:
(v) A loan with maturity of 12 months or less, if the purpose of the loan is a “bridge” loan connected with the acquisition of a dwelling intended to become the consumer's principal dwelling.
Posted By: mdog76

Re: HPML - Bridge Loan - 04/11/18 01:48 PM

So we are safe in saying that if its exempt from each part its exempt from the whole thing? Just want to make sure.
Posted By: rlcarey

Re: HPML - Bridge Loan - 04/11/18 02:19 PM

Being exempt from the escrow and appraisal rules does not turn the loan into a non-HPML.
Posted By: Adam Witmer

Re: HPML - Bridge Loan - 04/11/18 02:45 PM

Originally Posted By rlcarey
Being exempt from the escrow and appraisal rules does not turn the loan into a non-HPML.
Put another way, it is still considered an HPML but is exempt from the escrow and appraisal requirements. Basically, the way the rule is written you can't say it is a non-HPML.
Posted By: rlcarey

Re: HPML - Bridge Loan - 04/11/18 02:52 PM

i.e. if it a HPML and has a balloon payment, ATR is calculated differently, even if it is exempt from the escrow and appraisal requirements.
Posted By: Adam Witmer

Re: HPML - Bridge Loan - 04/11/18 03:00 PM

Exactly. Same for HMDA..... IF there is a scenario where the loan would be reportable.
Posted By: RR Joker

Re: HPML - Bridge Loan - 04/11/18 03:22 PM

Originally Posted By Adam Witmer
Exactly. Same for HMDA..... IF there is a scenario where the loan would be reportable.


This doesn't really mean anything anymore as all spreads [if any] are now reported wink
Posted By: mdog76

Re: HPML - Bridge Loan - 04/11/18 03:26 PM

Just so I am straight with this:
We are not a HMDA reporting Bank, the bridge loan would still be considered HPML but exempt from escrow and appraisal rules. So then what if any disclosures would be required?
Posted By: rlcarey

Re: HPML - Bridge Loan - 04/11/18 05:43 PM

There are no special disclosures for an HPML loan, it impacts underwriting, appraisals and escrows.
Posted By: mdog76

Re: HPML - Bridge Loan - 04/11/18 06:29 PM

Ok. Thank you all for the help.