Tabs

Bank/Thrift Supervision   |    Capital    |    CFPB    |    Deposit Insurance    |    Interchange    |    Mortgage Finance
Municipal Advisors   |    OCC-OTS Merger   |    Preemption    |    QM - QRM    |    Swaps   |    Volcker Rule    |    Full Topics List
 
Qualified Mortgage - Qualified Residential Mortgage
Swaps
Consumer Financial Protection Bureau - CFPB
Bank/Thrift Holding Company Supervision
Capital
Deposit Insurance
Interchange
Mortgage Finance
Municipal Advisors
OCC-OTS Merger
Preemption
Volcker Rule
Corporate Governance
Financial Stability Oversight Council (FSOC)
Appraisals
Office of Financial Research (OFR)
Systemic Risk
Supervision and Oversight
Payment, Clearing and Settlement
Prudential Supervision
Trust & Securities
Asset-Backed Securities
Resolution Authority

Friday, January 11, 2013

CFPB Issues Final Rule Expanding HOEPA Coverage

The CFPB issued a Dodd-Frank Act-mandated final rule that expands Home Ownership and Equity Protection Act (HOEPA) coverage for mortgages with high interest rates, fees or prepayment penalties.

The rule expands HOEPA to cover home-purchase loans and home equity lines of credit; revises the law’s rate and fee thresholds for coverage; and adds a new coverage test based on a transaction’s prepayment penalties.

Under the rule, a high-cost mortgage, among other things, is a loan with an annual percentage rate that is more than 6.5 percentage points higher than the average prime offer rate for first mortgages, and more than 8.5 percentage points higher than the average prime offer rate for second or junior mortgages.

For mortgages that qualify as high-cost, the rule generally bans balloon payments and prohibits prepayment penalties.

The rule also bans fees for modifying loans, caps late fees at 4%, prohibits closing costs from being rolled into the loan amount, and restricts fees lenders charge when consumers ask for a payoff statement.

Meanwhile, in a victory for ABA advocacy, the CFPB decided not to include in the final rule an “all-in APR” finance-charge option that would have dramatically altered APR calculations.

The final rule goes into effect on Jan. 10, 2014.

Read a consumer guide to the final rule.
Read the final rule.

No comments:

Post a Comment

Please read our comment policy before making a comment.