What are rules for higher-priced mortgage loans?
• Repayment ability • Prepayment penalties • Escrows What is the rule for repayment ability for higher-priced loans? A creditor shall not extend credit based on the value of the consumer’s collateral without regard to the consumer’s repayment ability as of consummation as provided in the What are the prohibited acts and practices under the ACT? question above. What is the rule for prepayment penalties for higher-priced loans? A loan may not include a prepayment penalty unless: The Can a lender charge a prepayment penalty? is satisfied. Under the terms of the loan, the penalty will not apply after the two-year period following consummation; the penalty will not apply if the source of the prepayment funds is a refinancing by the creditor or an affiliate of the creditor; and the amount of the periodic payment of principal or interest or both may not change during the fourth-year period following consummation. What are the new laws for escrow accounts for higher-priced loans? Except as pro
