The Consumer Financial Protection Bureau announced on Wednesday its annual adjustments to the dollar amounts of various thresholds under the Truth in Lending Act (TILA) regulations.
The new adjustments will apply to certain consumer credit transactions in 2018.
While the changes go beyond just mortgage finance, they are a part of the annual changes. The changes go into effect on Jan. 1, 2018.
As explained in the Federal Register, the bureau is required to calculate annually the dollar amounts for several provisions in Regulation Z, which implements TILA.
The final rule revises the dollar amounts for provisions implementing TILA and amendments to TILA, including:
- The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act)
- The Home Ownership and Equity Protection Act of 1994 (HOEPA)
- The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
The bureau stated that the changes were made where appropriate and based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2017.
For a full explanation of the changes, check here.
A spotlight on the changes to HOEPA are blow:
For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2018 will be $21,032. The adjusted points and fees dollar trigger for high-cost mortgages in 2018 will be $1,052.
For the general rule to determine consumers' ability to repay mortgage loans, the maximum thresholds for total points and fees for qualified mortgages in 2018 will be 3% of the total loan amount for a loan greater than or equal to $105,158; $3,155 for a loan amount greater than or equal to $63,095 but less than $105,158; 5 percent of the total loan amount for a loan greater than or equal to $21,032 but less than $63,095; $1,052 for a loan amount greater than or equal to $13,145 but less than $21,032; and 8 percent of the total loan amount for a loan amount less than $13,145.