HPML & HCM Questions

Do you have questions related to Higher-Priced and/or Higher-Cost Mortgage Loans?  You are not alone!  Here are some questions we’ve received:

Question: If we change the rate on a consumer loan that is subject to the Higher-Priced Mortgage Loan (HPML) or High-Cost Mortgage (HCM) requirements, do we need to verify if the new rate will make the loan an HPML or HCM?

Answer:  The only time you would need to go back and re-check the rate and/or points and fees is if you are refinancing the loan or making a new loan (i.e., note).

Question:  If we currently escrow for a non-HPML loan, will we lose our small creditor exemption status?

Answer:  To qualify for the Small Creditor exemption, you can’t have any escrow accounts other than those established for an HPML application received on or after April 1, 2010 and prior to June 17, 2021.  If you have an escrow account for a non-HPML, you don’t qualify for the exemption, unless the account was created to help a distressed borrower avoid foreclosure. 

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