TILA Threshold Adjustments for 2015

This is a reminder that the CFPB has issued annual threshold adjustments for several Truth in Lending Act rules, effective January 1, 2015, as summarized below. The complete text of the update can be found in the August 15, 2014 Federal Register. Please refer to that publication for details.

High Cost Loan [TILA, Regulation Z, 1026.32(a)(1)(ii)]

On January 1, 2015 the high cost (Section 32) provisions are changed as indicated below (old amounts shown struck through, new amounts following):

(ii) The transaction’s total points and fees, as defined in paragraphs (b)(1) and (2) of this section, will exceed:

(A) 5 percent of the total loan amount for a transaction with a loan amount of $20,000 $20,391 or more; or

(B) The lesser of 8 percent of the total loan amount or $1,000 $1,020 for a transaction with a loan amount of less than $20,000 $20,391.

Limits on points and fees for qualified mortgages [TILA, Regulation Z, 1026.34(e)(3)(i)]

On January 1, 2015 the limits for QM points and fees are changed as indicated below (old amounts shown struck through, new amounts following):

(3) Limits on points and fees for qualified mortgages.

(i) A covered transaction is not a qualified mortgage unless the transaction’s total points and fees, as defined in Section 1026.32(b)(1), do not exceed:

(A) For a loan amount greater than or equal to $100,000 $101,953: 3 percent of the total loan amount;

(B) For a loan amount greater than or equal to $60,000 $61,172 but less than $100,000 $101,953: $3,000 $3,059;

(C) For a loan amount greater than or equal to $20,000 $20,391 but less than $60,000 $61,172: 5 percent of the total loan amount;

(D) For a loan amount greater than or equal to $12,500 $12,744 but less than $20,000 $20,391: $1,000 $1,020;

(E) For a loan amount less than $12,500 $12,744: 8 percent of the total loan amount.