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Higher Price Loan Exemptions Raised

Exemption from escrow requirement


Dec. 30, 2013

By Mortgage Daily staff


The maximum size of a mortgage lender that can be exempted from requirements on higher-priced loans has been raised.

Mortgage companies are required by Regulation Z to establish escrow accounts for higher-priced loans. Reg Z implements the Truth in Lending Act.

However, creditors who have less than $2 billion in assets were exempted from the escrow requirement during 2013.

The Dodd Frank Wall Street Reform and Consumer Protection Act requires that the threshold be adjusted each year. Adjustments are based on the annual percentage increase in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers for each 12-month period ending in November.

The Consumer Financial Protection Bureau has released the threshold for next year.

Based on the required adjustment, the exemption threshold is being raised to $2.028 billion as of Jan. 1, 2014.

The asset size is based on Dec. 31, 2013.

"The adjustment to this asset-size threshold will also increase the threshold for small-creditor and balloon payment Qualified Mortgages under Regulation Z," the CFPB said.

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