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What is the difference between HPML, HPCT and HCML?

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Question: 
I can’t keep it straight anymore. What is the difference between an HPML, and HPCT, and an HCML? Aren’t they all virtually the same thing?
Answer: 

No, these acronyms are not at all interchangeable. Higher Priced Mortgage Loans (HPMLs) are pretty common and trigger special appraisal and escrow requirements. Higher Priced Covered Transactions (HPCTs) are only relevant to determining the level of legal protection on Qualified Mortgages (and the payment amount to compute for balloon Non-QMs), and High Cost Mortgage Loans (HCMLs) are another name for old HOEPA loans. They carry a boat-load of consequences and compliance concerns.

There is certainly some overlap between the categories, but great care must be taken to keep them straight. Misapplying one for another could cause compliance errors.

Learn more at the upcoming webinar “Taking a Fresh Look at Qualified Mortgages and the Ability-To-Repay Rule” on February 15, 2023!

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Learn more about Rebekah Leonard’s Taking a Fresh Look at Qualified Mortgages and the Ability-To-Repay Rule webinar.

First published on 01/15/2023

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