Under HMDA, what is the threshold for reporting the interest rate spread for first lien mortgage loans?
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A. B. C. D.A
Under the Home Mortgage Disclosure Act (HMDA), lenders are required to report certain information about their mortgage lending activities. This includes information about the interest rate on first lien mortgage loans.
Specifically, lenders must report the difference between the Annual Percentage Rate (APR) and a benchmark rate called the Average Prime Offer Rate (APOR). This difference is known as the "interest rate spread."
The threshold for reporting the interest rate spread depends on the size of the loan and whether it is subject to the Home Ownership and Equity Protection Act (HOEPA).
For first lien mortgage loans that are not subject to HOEPA, the threshold for reporting the interest rate spread is over 1.5 percentage points.
For first lien mortgage loans that are subject to HOEPA, the threshold for reporting the interest rate spread is over 3 percentage points or the loan's APR is more than 8 percentage points above the APOR for comparable transactions.
Therefore, among the answer choices provided, the correct option would be (C) Over 7 percentage points and when the loan is subject to the Home Ownership and Equity Protection Act.