A lender is considering a first-lien mortgage loan with an APR of 5.8% when the current APOR is 4.25%. The loan amount is $150,000 and the property value is $200,000. What additional requirement applies due to HPML status?
Correct Answer
C) Second appraisal if property was acquired within 180 days
Since the APR (5.8%) exceeds APOR (4.25%) by 1.55 percentage points, this is an HPML. Under Section 1026.35(c)(4), if the seller acquired the property within 180 days and the resale price exceeds the seller's acquisition price by certain thresholds, a second appraisal is required.
Why This Is the Correct Answer
Since the APR (5.8%) exceeds APOR (4.25%) by 1.55 percentage points, this is an HPML. Under Section 1026.35(c)(4), if the seller acquired the property within 180 days and the resale price exceeds the seller's acquisition price by certain thresholds, a second appraisal is required.
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Previous Question
A creditor receives two appraisals for an HPML as required. The first appraisal shows $400,000 value, the second shows $380,000. The creditor wants to use the higher value for underwriting. What disclosure requirement applies?
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