Since it is unusual for CFPB annual adjustments to result in reduced thresholds, we want to remind blog readers of the reduced HOEPA and QM points and fee limits that will be effective January 1, 2016.
Effective January 1, the lower limits will be:
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The total loan amount thresholds that determine whether a transaction is a high cost mortgage when the points and fees are either 5 percent or 8 percent of such amount will be, respectively, $20,350 and $1,017.
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The points and fees limits that a loan must not exceed to satisfy the requirements for a QM and related loan amount limits will be:
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For a loan amount greater than or equal to $101,749 (currently $101,953), points and fees may not exceed 3 percent of the total loan amount
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For a loan amount greater than or equal to $61,050 (currently $61,172) but less than $101,749, points and fees may not exceed $3,052
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For a loan amount greater than or equal to $20,350 (currently $20,391) but less than $61,050, points and fees may not exceed 5 percent of the total loan amount
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For a loan amount greater than or equal to $12,719 (currently $12,744) but less than $20,350, points and fees may not exceed $1,017
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For a loan amount less than $12,719 (currently $12,744), points and fees may not exceed 8 percent of the total loan amount
Also effective January 1 are revisions to the definitions of “small creditor” and “rural areas” in Regulation Z and a new requirement to include the assets of the creditor’s affiliates that regularly extended covered transactions in the calculation of the $2 billion asset limit for small-creditor status.
See our previous blog posts for more information on the adjustments and revisions.
