The threshold for fees that trigger additional disclosures under the Home Ownership and Equity Protection Act of 1994 has changed.
In a news release today, the Federal Reserve Board indicated that the fee-based trigger has been adjusted to $579.
But the adjustment doesn’t impact new high-priced rules adopted in July 2008 — which utilizes a different rate-based trigger.
The HOEPA fee threshold is adjusted annually based on changes in the Consumer Price Index as of June 1. The limit was initially established at the higher of $400 or 8 percent of the loan amount.
HOEPA restricts credit terms, including balloon payments, and requires additional disclosures when the fee trigger is reached. The high cost loan act falls under the Truth in Lending Act, which is implemented by Regulation Z.
The new trigger is effective on Jan. 1, 2010.
