CBC II: The APR and its Impact – Qualified Mortgage, HPML, HOEPA, MLA 2022 (A) | Indiana Bankers Association (IBA) | 17 May 2022 | Indiana Bankers Association, 8425 Woodfield Crossing Blvd Suite 155E, Indianapolis, IN 46240, USA

While we have been hesitant to discuss the new qualified mortgage rule in the CBC, as we thought it might change, the CFPB has recently issued new information regarding qualified mortgages and ARM loans, which leads us to believe that the qualified mortgage rule will change on October 1, 2022, as scheduled. The APR impacts qualified mortgages directly, and also impacts the other topics in the presentation.

Qualified Mortgages: The first subject will be the new qualified mortgage rule, which is fairly simple, but does have some issues that we will need to address for certain loan types. As with all the other topics in the presentation, the APR is the factor that will determine whether you have a qualified mortgage.

Higher Priced Mortgage Loans (HPML): The second subject will be HPMLs. This portion of the regulation contains a very similar calculation that will be used for qualified mortgages beginning October 1, 2022. HPMLs represent approximately 10% of the loans that are made across the country, based on HMDA data, and many of the HPML loans are adjustable-rate mortgages – but not all of them. As pricing becomes more critical based on our current economic situation, HPMLs may become more prevalent. We will review both the calculation and the impacts that HPML loans will have on the bank and the customer – including escrow and appraisals.

Topics:
1. Regulatory Update
• Subjects as released by the CFPB and other federal agencies.

2. Main Subjects
• The October 1, 2022, Qualified Mortgage Regulation
- A complete review of the requirements and impacts
• HPML Mortgage Loans
- Making the calculation
- The impacts of an HPML loan
• HOEPA Mortgage Loans
- Making the calculation
- The impacts of an HOEPA loan
• Military Lending Act
- Loan types where the calculation must be made
- Making the calculation
- The impacts of an MLA Loan

Who should attend?
Compliance officers, lending management, lenders and processors, and any others with responsibilities for lending should attend. Additionally, audit personnel will find this session useful.

2022 Speaker

Bill Elliott, CRCM
Sr. Consultant, Director of Compliance