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First Lien Home Equity Rates Measured Against APOR

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Why are first lien home equity rates being measured against a residential Average Prime Offer Rate (APOR) when these are two different products? It is hard to explain to a borrower that their home equity rate is priced higher than the average rate of an entirely different product, thus resulting in an escrow requirement.

Sounds like an internal pricing problem to me. Why would a home equity loan on a property that is free and clear be more risky than a loan in a purchase transaction?

First published on 08/18/2019

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