[kowsley]

I recently attended a real-estate lending class where Jack presented and had a couple of follow-up questions upon reviewing my notes:

1. I believe he made the statement that the 4% late fees and the 15 day grace period timing requirement in 1026.34(a)(8)(i) is retroactive for all our HOEPA loans? Is that correct? If so, how far back do we go to make that retroactive, since the inception of HOEPA loans?

2. Is it a requirement to track loans that have been redisclosed? For example, we have a changed circumstance and redisclose the earlies, should we be tracking that for any reason? What about redisclosure of the HUD? I couldn’t find this in the reg. or commentary but wanted to clarify.

Thanks!

[rcooper]

1. I don’t see an exemption for older loans so my interpretation is that it would apply to all High Cost Mortgage loans on your books.

2. I’ve never heard of a requirement to track re-disclosures. Make sure your file is well documented.

[jholzknecht]

Sorry about the delay in getting involved in this discussion. Vacation got in the way.

1. The revised late charge and grace period apply to Section 32/High Cost/HOEPA loans for which an application is received on or after January 10, 2014. In the seminar we discussed the need to code loans that are Section 32/High Cost/HOEPA loans to assure the proper late charges and grace period are applied. Many banks have already coded loans as Section 32/High Cost/HOEPA loans. If they continue to use the existing code for new Section 32/High Cost/HOEPA loans they may not be able to discern which loans resulted from applications received on or after January 10, 2014. An easy solution is to apply the revised late charge and grace period to new and existing Section 32/High Cost/HOEPA loans. Most banks have few of these loans, and have a low delinquency ratio, so the lower late charge and longer grace period would have minimal impact on earnings.
2. I concur with Robin, there is no requirement to track re-disclosures. From the management perspective it may be helpful to know the frequency of re-disclosure and what created the need to re-disclose.

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