Effective January 1, 2014, the Regulation Z threshold used to determine small creditor status will be $2.028 billion. This threshold comes into play for HPML escrow accounts under §1026.35(b)(2)(iii)(C), which is already in effect, and the Ability to Repay/Qualified Mortgage rules under §1026.43 which go into effect January 10, 2014.
To be exempt from the HPML escrow requirements as of January 1st, an institution must meet ALL of the following:
- Have an asset size of less than $2.028 billion as of December 31, 2013;
- In the prior calendar year, the creditor and any affiliates together originated no more than 500 first lien dwelling secured loans; and,
- In any of the 3 preceding calendar years, more than 50% of the creditor’s consumer purpose first-lien loans were secured by dwellings located in counties deemed to be rural or underserved; and,
- Neither the creditor or its affiliates maintain escrow accounts, except for those previously established due to the HPML requirements or escrow accounts established after closing to assist a borrower in avoiding default or foreclosure.
Additionally, on January 10, 2014, any institutions looking to originate Small Creditor Portfolio Qualified Mortgages or Balloon Payment Qualified Mortgages must meet the loan volume restrictions (#2 above) AND have assets of less than $2.028 billion as of December 31, 2013.