HOEPA Triggers Raised

High cost loan threshold now $528
By MortgageDaily.com staff
8/5/2005

The dollar amount of fees that trigger high cost loan disclosures has been increased.

Effective Jan. 1, 2006, the fee-based trigger for loans falling under the Home Ownership and Equity Protection Act of 1994 will be $528, the Federal Reserve Board said Thursday.

The fee-based trigger was originally set at $400 at its implementation in 1994 and adjusts annually based on changes in the Consumer Price Index, according to the announcement. The trigger currently stands at $510.

HOEPA is among Regulation Z Truth in Lending requirements that lenders "disclose credit terms and the cost of consumer credit as an annual percent," according to a supplemental statement. "The act requires additional disclosures for loans secured by a consumer's home, and permits consumers to cancel certain transactions that involve their principal dwelling."

High cost loan disclosures are reportedly required when total points and fees payable by the borrower exceed the fee-based trigger or 8 percent of the total loan amount, whichever is larger.

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