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Volume 2, Issue 2, 2002   Federal Reserve Bank of Dallas

Changes to Regulation Z Expand Loans Subject to HOEPA

Anecdotal evidence of abusive practices in the home equity lending market led to the enactment of the Home Ownership Equity Protection Act (HOEPA). The act was amended in late 2001, and compliance under the new rules becomes mandatory on Oct. 1, 2002. The rate-based trigger was lowered by 2 percentage points for first-lien mortgages, and the fee-based trigger was revised to include the cost of optional credit insurance and similar debt protection products paid at closing. Further, the amendments restrict certain acts and practices in connection with home-secured loans. Read more »

Determining Coverage Under HOEPA

To understand how these amendments affect a typical home equity loan, a loan example has been developed that incorporates the changes in the regulation. The annual percentage rate test and the points and fees test are applied to a loan example. Read more »

News & Events

  • Revisions to Regulation Z (Truth in Lending) official staff commentary, which applies and interprets the requirements of the regulation, were issued on April 3, 2002. Read more Off-site page
  • The Federal Reserve Board approved a final rule that postpones the effective date of the recent amendments to Regulation C (Home Mortgage Disclosure Act) from Jan. 1, 2003, to Jan. 1, 2004. Read more Off-site page
  • The Federal Reserve Bank of Dallas is hosting a New Markets Tax Credit workshop in Dallas on July 23 and in El Paso on July 24. Representatives from the CDFI fund will provide an overview of the NMTC program, including how to apply for a tax credit allocation. Community development experts and bankers will discuss how the tax credits can be used. Read more Off-site page
  • The 2002 National Community Development Lending School, sponsored by the Federal Reserve Bank of San Francisco and the University of Southern California, will be held July 21–25 in Los Angeles. Applications will be accepted until June 21. Read more Off-site page
  • The Faith and Philanthropy Institute, in partnership with the Dallas Affordable Housing Coalition, The Enterprise Foundation, the Fannie Mae Foundation and others, is sponsoring the 2002 Moving Beyond the Walls workshop on Sept. 10–13. The training is designed to help develop critical management skills and strategic perspectives to start, manage and grow a faith-based community development organization. Read more Off-site page
  • The Enterprise Foundation Network Conference will be held in Dallas on Oct. 30–Nov. 2. The conference will feature ways to find affordable-housing financing solutions, leverage the New Markets Tax Credit, efficiently manage programs, put together tax credit deals that work and more. The conference will also feature the Enterprise Foundation's 20th Anniversary Gala Dinner on Oct. 31. Read more Off-site page
  • The Federal Reserve is sponsoring the conference "Banking Opportunities in Indian Country" on Nov. 18–20 in Scottsdale, Ariz. This national conference is designed to encourage initiatives and partnerships that increase access to credit and capital and strengthen local economies. Read more Off-site page
  • The Joint Center for Housing Studies at Harvard published a report in March 2002 that examines the CRA in light of the transformed world of mortgage and financial services. The report compares the lending patterns of CRA-regulated entities with those of lenders outside CRA's regulatory framework. Read more »
  • Fannie Mae Foundation has launched www.knowledgeplex.org Off-site page, providing the latest information on community development and housing trends and issues. The site offers ideas from diverse experts on solving community development and housing problems.

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