Are Home Equity Lines of Credit (HELOCs) included in the definition of a higher priced mortgage loan?
Only those simultaneous second lien HELOCs that permit the borrower to defer the payment of interest or principal, as well as any HELOC that meets the applicable high-rate high-fee thresholds set forth in 8-103 (1-A)(FF) of the new law, are included in the definition of a “higher priced mortgage loan.” As a result of P.L. 2007 chapter 471, “An Act Relating to Mortgage Lending and Credit Availability” this answer modifies Advisory Ruling #111 (See AR #111, Exclusion of HELOCs from definition of “subprime loan” (now “higher priced mortgage loan”) [http://www.maine.gov/pfr/consumercredit/advisory_rulings/AR111.doc]). (See also Advisory Ruling # 117, The Conforming Law and its effect on previous Joint Advisory Rulings and the Tangible Net Benefit and Ability to Pay Rule [http://www.maine.gov/pfr/consumercredit/advisory_rulings/AR117.htm].) Simultaneous second HELOCs that are “convenience” HELOCs as described in Advisory Ruling #116 are not higher priced mortgage loans if a) the convenience
