To the Wa Financial Group Students

Hi Everyone,

Thanks for a thoroughly enjoyable class today and all your kind words in the evals.  Here’s the follow up:

Q: Where can I find out what interest rate the Fed will use so I can figure out if I have a high cost loan?
Here’s some insight from a great article by Blank Rome:

“…the measuring stick is the “average prime offer rate,” which is defined in the Final Rule as an annual percentage rate derived from average interest rates, points and other loan pricing terms that are currently offered to consumers by a representative sample of lenders for mortgage transactions that have low-risk pricing characteristics.At least initially, the Fed will use information derived from Freddie Mac’s Primary Mortgage Market Survey (“PMMS”), but may eventually develop its own tables. The average prime offer rate for both fixed and adjustable rate loans will be published in a table and updated at least weekly.
A loan is considered higher-priced if its APR exceeds the applicable average prime offer rate by 1.5 percentage points or more for first lien loans and 3.5 percentage points or more for junior lien loans.Unlike the HOEPA APR test, which compares the loan’s APR to the applicable Treasury security yield as of the 15th day of the month immediately preceding the month in which the application is received, the Final Rule requires that the loan’s APR be measured against the applicable average prime offer rate “as of the date the interest rate is set.” The Official Staff Commentary clarifies that if a loan’s rate is initially set at one level but then changed prior to closing, a lender must use the last date the interest rate is set before closing.”

Remember, there’s a “general business day” definition which we use when sending out our EARLY disclosures and there’s a “precise business day” definition which we will use when counting the days after we’ve had to re-disclose prior to signing. See page 8 of this MBAA PDF.   The MBAA is correct. The industry deserves an answer from the FRB on this conflict.

I’ve emailed Sam a PDF copy of the MDIA color coded matrix.

Here is a list of WA State Housing Counseling Agencies

Here is more info on sociopaths.

and finally, Cookie Monster wanted to know why a “lady” was chosen to represent “justice”

See you next year for exam prep!

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