Publications

A mortgage loan is covered by special Federal Truth-in-Lending Act HOEPA requirements if the annual percentage rate on the loan at consummation will exceed by more than a "specified percentage" the yield on U.S. government securities Treasury constant maturities having comparable periods of maturity to the loan maturity.

For this federal law, applicable U.S. Treasury security yield is determined as of the 15th day of the month immediately preceding the month in which the loan application is received by the creditor. [Commentary: An application transmitted through a broker is "received" when it reaches the creditor.]

If there is no U.S. government security Treasury constant maturities with a maturity that matches the loan's maturity, the lender should round to the nearest security yield. [Commentary: If loan maturity is exactly halfway between two securities, the APR is compared with the Treasury security that has the lower yield.]

Example: What are "trigger" rates for loan applications received by lender in February 2013?

Look to U.S. Treasury yields for January 15, 2013. Compare these yields to the APR on the loan. (Note: when the loan closes is not a measuring date.) Loan is covered by HOEPA if APR at consummation exceeds the trigger rate.