The dollar amount of loan fees that trigger a high-cost loan classification is being increased.
The trigger for fees on mortgages subject to the Home Ownership Equity Protection Act of 1994 is being raised to $592, the Federal Reserve Board reported Wednesday.
The update is effective on Jan. 1, 2011.
The dollar amount applies only when points and fees on a loan exceed 8 percent.
The Fed is required to adjust the dollar amount annually based on changes in the Consumer Price Index every June 1.
This year’s HOEPA threshold is $579.
The act amends requirements of the Truth in Lending Act, which is implemented by Regulation Z. Lenders who make HOEPA loans are subject to additional disclosure requirements.
Today’s revisions don’t impact trigger revisions announced in July 2008.
“On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted into law,” the Fed said in today’s filing. “Section 1431 of the Reform Act revises the statutory fee trigger for HOEPA loans. The amendments made by Section 1431 of the Reform Act will be implemented in a future rulemaking.”
