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We are updating the fields in our Laser Pro system for end-of-year HOEPA triggers. Where can we find the state of Illinois high cost mortgage interest rate triggers for first and second liens? Also, where can we find the HOEPA triggers for first lien non-real estate loans less than $20,000 and greater than or equal to $20,000?

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The Illinois High Risk Home Loan Act contains similar restrictions as the federal HOEPA high-cost mortgage regulations. Under this law, the interest rate trigger for a “high risk home loan” is an annual percentage rate that exceeds the average prime offer rate (APOR) by more than six percentage points for first lien mortgages or by more than eight percentage points for junior lien mortgages. The APOR tables for fixed and adjustable rate mortgage loans (updated through January 25, 2021) are available on the FFIEC’s HMDA website, which we link to in the bulleted resources below.

The HOEPA points and fees trigger depends on whether the loan amount is less than an inflation-adjusted threshold of $20,000 or greater than or equal to the inflation-adjusted threshold of $20,000. For 2021, that threshold is $22,052. For transactions that are less than the inflation-adjusted threshold, the total points and fees threshold is the lesser of 8% or an inflation-adjusted amount of $1,000. For 2021, that threshold is $1,103. The Illinois High Risk Home Loan Act operates under the same thresholds as the federal HOEPA thresholds as established under Regulation Z.

For resources related to our guidance, please see:

  • Illinois High Risk Home Loan Act, 815 ILCS 137/10 (“‘High risk home loan’ means a consumer credit transaction, other than a reverse mortgage, that is secured by the consumer’s principal dwelling if: (i) at the time of origination, the annual percentage rate exceeds by more than 6 percentage points in the case of a first lien mortgage, or by more than 8 percentage points in the case of a junior mortgage, the average prime offer rate, as defined in Section 129C(b)(2)(B) of the federal Truth in Lending Act, for a comparable transaction as of the date on which the interest rate for the transaction is set . . .”)
  • Truth in Lending Act, 15 USC 1639c(b)(2)(B) (The term ‘average prime offer rate’ means the average prime offer rate for a comparable transaction as of the date on which the interest rate for the transaction is set, as published by the Bureau.”)
  • Regulation Z, 12 CFR 1026.32(a)(1)(ii) (“The requirements of this section apply to a high-cost mortgage, which is any consumer credit transaction that is secured by the consumer's principal dwelling, other than as provided in paragraph (a)(2) of this section, and in which: . . . (ii) The transaction's total points and fees, as defined in paragraphs (b)(1) and (2) of this section, will exceed:

(A) 5 percent of the total loan amount for a transaction with a loan amount of $20,000 or more; the $20,000 figure shall be adjusted annually on January 1 by the annual percentage change in the Consumer Price Index that was reported on the preceding June 1; or

(B) The lesser of 8 percent of the total loan amount or $1,000 for a transaction with a loan amount of less than $20,000; the $1,000 and $20,000 figures shall be adjusted annually on January 1 by the annual percentage change in the Consumer Price Index that was reported on the preceding June 1 . . .”)

  • Regulation Z, Official Interpretations, Paragraph 32(a)(1)(ii) Comment 3 (“For purposes of § 1026.32(a)(1)(ii), a creditor must determine the applicable points and fees threshold based on the face amount of the note (or, in the case of an open-end credit plan, the credit limit for the plan when the account is opened). However, the creditor must apply the allowable points and fees percentage to the ’total loan amount,’ as defined in § 1026.32(b)(4). For closed-end credit transactions, the total loan amount may be different than the face amount of the note. The $20,000 amount in § 1026.32(a)(1)(ii)(A) and (B) is adjusted annually on January 1 by the annual percentage change in the CPI that was in effect on the preceding June 1.

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vii. For 2021, $22,052 reflecting a 0.3 percent increase in the CPI-U from June 2019 to June 2020, rounded to the nearest whole dollar.”)

  • Regulation Z, Official Interpretations, Paragraph 32(a)(1)(ii) Comment 1 (“Annual adjustment of $1,000 amount. The $1,000 figure in § 1026.32(a)(1)(ii)(B) is adjusted annually on January 1 by the annual percentage change in the CPI that was in effect on the preceding June 1. The Bureau will publish adjustments after the June figures become available each year.

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vii. For 2021, $1,103, reflecting a 0.3 percent increase in the CPI-U from June 2019 to June 2020, rounded to the nearest whole dollar.”)

  • Illinois High Risk Home Loan Act, 815 ILCS 137/10 (“‘High risk home loan’ means a consumer credit transaction, other than a reverse mortgage, that is secured by the consumer’s principal dwelling if: . . . (iii) the total points and fees . . . will exceed (1) 5% of the total loan amount in the case of a transaction for $20,000 (or such other dollar amount as prescribed by federal regulation pursuant to the federal Dodd-Frank Act) or more or (2) the lesser of 8% of the total loan amount or $1,000 (or such other dollar amount as prescribed by federal regulation pursuant to the federal Dodd-Frank Act) in the case of a transaction for less than $20,000 (or such other dollar amount as prescribed by federal regulation pursuant to the federal Dodd-Frank Act), except that, with respect to all transactions, bona fide loan discount points may be excluded as provided for in Section 35 of this Act.”)