The Rate Set Date

There are several regulatory requirements found in Regulation Z that rely on a rate spread calculation to determine applicability. High-Cost Mortgages (HCM) are one example. One of the “tests” to determine whether you have an HCM is an APR test. It states if the APR is greater than the Average Prime Offer Rate (APOR) plus a margin (for a comparable transaction based on the lien status), you have an HCM. The APR you use in this test is the APR in effect on the date the interest rate was set for the last time. This is an area we see A LOT of confusion.

Jerod explains more in the video.

Video Highlights:

• Determining the “date the rate is set” is commonly misunderstood.
• The date the rate is set could be a variety of different dates (application date, written rate lock agreement date, Closing Disclosure date, etc.)

Published
2023/04/06