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HPML Rules for First Lien Home Equity Installment Loans

Question: 
What are the HPML rules for a home equity installment loan when the lien for the home equity installment loan is a first lien?
Answer: 

For first liens, generally, an escrow is required. You must also document ability to repay by including all obligations, including mortgage obligations such as property taxes and insurance. An appraisal notice is required within three days of application with a copy of the appraisal being provided at least three business days before consummation. Also, a second appraisal is required (at the financial institution's expense) if relative to the consumer's purchase agreement, the seller acquired property within:

90 days, and new price exceeds seller's purchase price by 10%
OR
180 days, and new price exceeds seller's purchase price by 20%

One of the appraisals must include analysis of the difference between the price the seller paid, and the price the consumer is paying.

Vendor: 
Wipfli's Financial Institutions Practice has served the banking industry for more than 85 years. Our seasoned professionals have banking experience, dedicate their time to clients throughout the United States, and provide regulatory compliance, information technology, risk management, strategic planning, board development, audit, and tax services. Visit http://www.wipfli.com/fi, call 800.486.3454 or contact wipflifipractice@wipfli.com.

First published on 07/05/2015

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