The Federal Reserve Board published a final rule Monday amending the definition of a "higher-priced" mortgage under the Home Mortgage Disclosure Act.
The central bank broadened the definition as part of its rule writing in July under the Home Ownership and Equity Protection Act. Monday's change was to coordinate the definitions under the two acts. The Fed also said the change was meant to cover subprime mortgages more fully while avoiding covering prime loans.
Under the new definition, a higher-priced loan is one whose annual percentage rate spread is at least 1.5 percentage points for a first-lien loan or 3.5 points for a subordinate-lien one.
Under the HMDA, lenders are required to collect and report public data on originations and purchases of higher-priced mortgages.