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HPMLs/ part of reg Z


Higher priced mortgage loans
Mind Map by andrea.browne, updated more than 1 year ago
Created by andrea.browne over 6 years ago

Resource summary

HPMLs/ part of reg Z
  1. Also know as sec 35
    1. Appraisial Requirements
      1. Safe Harbor
        1. Orders the appraiser to perform the appraisal in compliance with USPAP and FIRREA
          1. Uses the National Registry to verify that the appraiser is certified or licensed in the state where the appraised property that is securing the loan is located
            1. Confirms that the written appraisal meets each of the requirements of Appendix N
              1. Has no knowledge contrary to the facts of certifications contained in the appraisal
        2. Creditor must provide a disclosure no later then the 3rd business day
          1. Creditor must provide the completed appraisal no later then 3 business days prior to consummation
            1. NO FEES for appraisal copies
              1. Sometimes 2 appraisals are required to curb the practice of property flipping
      2. Higher Priced Mortgage Loans
        1. Escrow accounts
          1. Must be established and maintained for a minimum of five years
            1. Escrow not required for subordinate lien HPMLs, A transaction secured by shares in a cooperative, a transaction to finance the initial constuction of a dwelling, a reverse mortgage, open-end credit, insurance premiums purchased by the consumer and not required by the creditor
            2. Applies to closed end loans that are secured by the borrower's principal dwelling that surpass a given threshold
              1. Small Creditor Expemtion
                1. Qualifications
                  1. During any of the 3 preceding years, the creditor extended more than 50% of covered transactions secured by a first lien on residential real property in countries qualified as "rural" or "underserved"
                    1. The combined first-lien originations of the creditor and its affiliates did not exceed 500 loans during the preceding calendar year
                      1. At the end of the preceding calendar year, the creditor had assets worth less the $2 billion
                        1. Neither the creditor nor its affiliates maintain an escrow account for any extension of consumer credit secured by real property or a dwelling that the creditor or its affiliate currently services
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