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Truth-in-Lending (Regulation Z) Annual Threshold Adjustments
On June 16, 2016, the Consumer Financial Protection Bureau (CFPB) issued its final rule to revise, as applicable, the dollar amounts for provisions implementing amendments to TILA under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Homeownership and Equity Protection Act of 1994 (HOEPA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
In addition to adjusting these amounts, where appropriate, based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2016, the Bureau is correcting a calculation error pertaining to the 2016 subsequent violation penalty safe harbor fee. For open-end consumer credit plans under the CARD Act, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged in 2017. The adjusted dollar amount for the safe harbor for a first violation penalty fee will remain unchanged at $27 in 2017; the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will remain unchanged in 2017 from the corrected amount of $38 applicable in 2016. For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2017 will be $20,579. The adjusted points and fees dollar trigger for high-cost mortgages will be $1,029.
For the general rule to determine consumers' ability to repay mortgage loans, the maximum threshold for total points and fees for qualified mortgages in 2017 will be three percent of the total loan amount for a loan greater than or equal to $102,894; $3,087 for a loan amount greater than or equal to $61,737, but less than $102,894; five percent of the total loan amount for a loan greater than or equal to $20,579 but less than $61,737; $1,029 for a loan amount greater than or equal to $12,862 but less than $20,579; and eight percent of the total loan amount for a loan amount less than $12,862.
Full EAD Portal Appraisal Submissions Required
The Federal Housing Administration (FHA) announced that the Electronic Appraisal Delivery (EAD) portal becomes mandatory for all appraisal submissions for originations with case numbers assigned on and after June 27, 2016. On and after the June 27 effective date, mortgagees will no longer be able to:
1. Use both the EAD portal and other appraisal submission methods concurrently for originations;
2. Submit appraisals for originations with case numbers assigned on and after June 27 to FHA through any method other than the EAD portal; and
3. Access the Appraisal Logging Screen in FHA Connection for case numbers that require an appraisal to be submitted through the EAD portal.
Please refer to FHA INFO #16-37 for more details.
Melanie A. Feliciano Esq. is DocMagic Inc.’s chief legal officer and currently serves as editor-in-chief of DocMagic’s electronic compliance newsletter, The Compliance Wizard. She received her JD from the Georgetown University Law Center, and is licensed in California and Texas. She may be reached by phone at (800) 649-1362 or e-mail [email protected].
This article originally appeared in the July 2016 print edition of National Mortgage Professional Magazine.