| Fed Revises Loan Disclosure Threshhold
$499 for ’04 August 27, 2003 By MortgageDaily.com staff |
| The Federal Reserve Board has announced an upward revision of the fee which triggers disclosure of mortgage information.
Last week, the Fed announced the new figure for that threshold, originally set forth at $400 in the Home Ownership and Equity Protection Act of 1994 (HOEPA). As of January 1, 2004, the adjusted amount will be $499, the Fed said. This amount marks a 2.22 percent increase over 2002’s level of $488. HOEPA, which is part of the Truth-in-Lending Act, governs mortgage lenders on loans that have fees or rates above a certain amount. In addition to the $499 threshhold for fees, the loan falls under HOEPA if the rate surpasses eight percent. The new triggering fee amount is determined by taking the prior amount and adjusting it based on the variance in the Consumer Price Index-U (CPI-U) (based on urban consumers) as of June 1 of the year preceding the change. The CPI-U is published by the Bureau of Labor Statistics mid-monthly. For the June 1 CPI-U, the variance between April 2002 and April 2003 would be the “effective” CPI-U for June 1, according to the Fed. |
