NCUA Regulatory Alert Gives CUs Updates on HOEPA Trigger Amounts

ALEXANDRIA, Va. – The NCUA issued Regulatory Alert No. 05-RA-08 to provide credit unions the latest information on updates by the Board of Governors of the Federal Reserve System on the maximum amount of points and fees that may be charged to a borrower without triggering HOEPA requirements. Effective Jan. 1, 2006, the trigger amount will increase to $528. In addition, if total points and fees equal the greater of $528 or 8% of the loan, HOEPA requires additional disclosures be provided to the borrower. The NCUA Regulatory Alert also reminded CUs that HOEPA applies to: – First lien mortgage loans, excluding home purchases where: * the annual percentage rate exceeds the rate of the comparable maturity Treasury security by more than 8 percentage points, or * total fees and points payable by the consumer at or before closing exceed the greater of 8 percent of the total loan amount or the annual trigger amount. – Second lien mortgage loans where: * the APR exceed the rate of the comparable maturity Treasury security by more than 10 percentage points, or * total fees and points payable by the consumer at or before closing exceed the greater of 8 percent of the total loan amount or the annual trigger amount. – Other refinancing and home equity installment loans, excluding reverse mortgages and open ended lines of credit where: * the APR exceeds the rate of the comparable maturity Treasury security by more than 10 percentage points, or * total fees and points payable by the consumer at or before closing exceed the greater of 8 percent of the total loan amount or the annual trigger amount.