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Calculation of Points
and Fees Trigger
The High Risk Home Loan Act (815 ILCS 137/10) requires the annual calculation of the points and fees trigger for high risk home loans. The Act states in part, the following:
| ““…High risk home loan”… (ii) the total points and fees payable by a consumer at or before closing will exceed the greater of 5% of the total loan amount or $800. The $800 figure shall be adjusted annually on January 1 by the annual percentage change in the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor.” |
| Point
and Fees Triggers
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Base year (2004 annual CPI) |
$800 |
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Year 2005 (800 X 1.027) |
$822 |
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Year 2006 (822 x 1.034) |
$850 |
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Year 2007 (850 X 1.025) |
$871 |
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Year 2008 (871 X 1.041) |
$907 |
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Year 2009 (907 X 1.001) |
$908 |
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Year 2010 (908 x 1.027) |
$933 |
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Year 2011 (933 x 1.015) |
$947 |
The monthly CPI release dates are presented at http://www.bls.gov/cpi/#data .
In order to ensure uniformity in the points and fees trigger, the following procedure will be utilized for the points and fees calculation:
- Go to the site for the Bureau of Labor Statistics ( http://www.bls.gov/cpi/ );
- Find the table that provides the latest CPI-U , US city average for all items (use the "not seasonably adjusted" (NSA) percentage;
- Calculate the new "total points and fees payable by the consumer" for the current year only (Please note: the percentage must be obtained before the CPI release date for February of the current year. The monthly CPI release dates are presented at http://www.bls.gov/cpi/#data ) ; and
Maintain the amount, for your records, until the next reporting year. |
Bureau
of Residential Finance |
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