01/04/2010
HPML does not apply to construction loans or other temporary financing with a term of 12 months or less, but what if the construction loan is modified later to a later maturity date of over one year. Does HPML now apply?
01/04/2010
This is in regard to the higher priced mortgage loan rules that went into effect on 10/01/09. Someone said that you are not allowed to ask for tax returns at the time of application, which seems strange since you are required to verify income. Is this true?
12/14/2009
Relative to the higher priced mortgages that take effect on Oct. 1, it seems that I read that it would be unacceptable to make loans lines of credit or one-year ARMS to avoid compliance with Section 35 of Regulation Z. What are your thoughts about three year fixed rate balloons? It appears that this term along with our pricing will possibly avoid Section 35 requirements.
12/07/2009
We are working on the Reg. Z changes that came out Oct. 1, in relation to a higher price mortgage loan (HPML). We offer one, three, or five year ARM loans which meet the test for a HPML. All three of our ARM types originate at an index + margin (fully indexed rate) and are subject to an adjustment either at one, three or five years based on whatever the index is at that time plus the same margin the loan originated with. We assumed that we would have to calculate the repayment ability based on a worse case payment adjustment that could happen during the first seven years; however, I don't see an example for doing this in 226.34(a)(4)(iii)b. Do you believe that we are permitted to calculate the repayment ability based on the originating payment amount, because our rate is fully indexed at origination and subsequent adjustments are based on the current index rate at that time plus the same margin used at origination?
11/30/2009
When calculating the highest payment for the first seven year period of an HPML loan, must a balloon payment be included in what the consumer has to be able to pay?
11/23/2009
Do you have to include the escrow portion of the payment on the TIL for Reg. Z purposes? If an escrow payment increases during the life of an HPML, do we need to re-verify income based on the new payments?
11/10/2009
This is a compilation of links to some of the liveliest recent threads relating to the lending compliance challenges bankers are dealing with at this time.