New York Codes, Rules and Regulations
Title 3 - BANKING
Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT
Part 42 - Subprime Home Loans-thresholds
Section 42.2 - Adjustment of subprime threshold

Universal Citation: 3 NY Comp Codes Rules and Regs ยง 42.2

Current through Register Vol. 46, No. 12, March 20, 2024

(a) Threshold adjustment. Notwithstanding the subprime threshold currently set forth in Banking Law section 6-m, and subject to the exclusions set forth in subdivision (b) of this section, a subprime home loan, if insured by the FHA, means a home loan in which the initial interest rate or the fully-indexed rate, whichever is higher, on the loan exceeds by more than two-and-a-half percentage points for a first-lien loan, or by more than four-and-a-half percentage points for a subordinate-lien loan, the average commitment rate for such loans in the northeast region with a comparable duration to the duration of such home loan, as published by the Federal Home Loan Mortgage Corporation (herein "Freddie Mac") in its weekly Primary Mortgage Market Survey (PMMS) posted in the week prior to the week in which the lender provides the "good faith estimate" required under 12 USC section 2601 et seq."

(b) Exclusions.

(1) The following types of FHA-insured loans are excluded from the threshold adjustment in subdivision (a) of this section, and instead are examined in accordance with the threshold currently set forth in Banking Law section 6-m:
(i) Title I Home Improvement Loans;

(ii) Home Equity Conversion Mortgages; and

(iii) any loan in which the fully-indexed rate, calculated using the FHA MIP policies that were in effect immediately prior to the effectiveness of Mortgagee Letter 2013-04, exceeds the unadjusted subprime threshold.

(2) All home loans other than FHA-insured loans are excluded from the threshold adjustment in subdivision (a) of this section, and instead are examined in accordance with the threshold currently set forth in Banking Law section 6-m.

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