Fed adjusts fee-based HOEPA trigger to $579

The Federal Reserve Board has published its annual adjustment of the dollar amount of fees that triggers additional disclosure requirements under the Truth in Lending Act for home mortgage loans that bear rates or fees above a certain amount. The dollar amount of the fee-based trigger has been adjusted to $579 for 2010 based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1, 2009. The adjustment is effective Jan. 1, 2010. This adjustment does not affect the new rules for "higher-priced mortgage loans" adopted by the Board in July 2008. Coverage of mortgage loans under the July 2008 rules is determined using a different rate-based trigger. The Home Ownership and Equity Protection Act (HOEPA) of 1994 restricts credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed the fee-based trigger (initially set at $400 and adjusted annually) or 8 percent of the total loan amount, whichever is larger. For more informatiopn, visit www.federalreserve.gov.