What is a high cost home loan?
The legislation defines a high cost home loan as a loan that exceeds one of two thresholds: Interest Rate Threshold For First Mortgages: 8% over the U.S. Treasury securities For Second Mortgages and Consumer Mobile Homes: 10% over the U.S. Treasury securities Points and Fees Threshold Loans more than $20,000: 5% of the loan Loans less than $20,000: the lesser of 8% of the loan or $1,000 Non-real Estate Mobile Homes ($20,000 or more): 3% of the loan If a loan is determined to be a “high cost loan,” the borrower must receive mandatory, free counseling on the advisability and appropriateness of the loan for the borrower.
Related Questions
- Must all loans in which the points and fees exceed 5% be classified as High Cost loans pursuant to the Illinois High Risk Home Loan Act?
- What type of information will a high cost home loan credit counselor be required to include in the annual report?
- What must a high cost home loan credit counselor do to: 1) Change a licensed business address?
