Updated HOEPA Dollar Amount Fee, Loan Amount Triggers, Qualified Mortgage Points and Fee Thresholds – NMP


Regulation Z requires the Consumer Financial Protection Bureau (CFPB) to make annual adjustments to dollar amount thresholds under the HOEPA “points and fees” provisions of Regulation Z §1026.32 (a) (1) (ii) (section 32) ) and the “points and charges” provisions of qualifying mortgages under Regulation Z §1026.43 (e) (3) (ii) based on changes in the consumer price index for all urban consumers (IPC-U). For 2016, the dollar amount adjustments reflect a 2% decrease in the CPI-U.

HOEPA points and fees thresholds
The CFPB issued a final rule, effective January 1, 2016, that the dollar amount of the HOEPA fee-based trigger will decrease to $ 1,017. In addition, the threshold for the total loan amount used to determine whether a loan is subject to HOEPA’s “total points and charges” provisions, or Section 32, is $ 20,350.

The fee-based trigger is used to determine whether the total points and fees payable by the consumer at or before the loan is closed subjects that loan to section 32. Section 32 applies, in part, to certain loans if the total points and fees payable by the at or before closing the loan, exceeds the greater of eight percent of the total loan amount or a dollar threshold.

In addition to the federal Section 32 test, this annual adjustment affects anti-predation loan laws in the following states: Colorado, Florida, Maryland, Massachusetts, Oklahoma, Pennsylvania, Texas, and Utah.

Eligible mortgage points and fees thresholds
Additionally, the Final Rule updates dollar amount thresholds for determining whether a loan is a qualifying mortgage under the “points and charges” provision specified in section 1026.43 (e) (3) (ii ) of Regulation Z, as follows:

No change to the 2016 conventional loan limits
The Federal Housing Finance Agency (FHFA) announced that with the exception of 39 counties in which loan limits to high-cost areas have increased, the maximum lending limits compliant for 2016 for prime loans and second tier will remain unchanged from the maximum compliant loan. limits for 2015.

Note that loan limits apply to the original mortgage amount, not its balance at the time of purchase by Fannie Mae, and the loan inception date is the note date. For more information on the Conventional Compliant Loan Limits for 2016, please refer to Fannie Mae’s Lender Letter 2015-07 and Fannie Mae’s website.



Mélanie A. Feliciano Esq. is the General Counsel of DocMagic Inc. and is currently the Editor-in-Chief of DocMagic’s electronic compliance newsletter, The Compliance Wizard. She received her JD from Georgetown University Law Center and has degrees in California and Texas. She can be reached by phone at (800) 649-1362 or by email [email protected].



This article originally appeared in the January 2016 edition of National Mortgage Professional Magazine.


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