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Panel updates mortgage statute to use CFPB APOR as benchmark for high-cost loan tests
Summary
The subcommittee approved S780, which revises the definition of 'conventional mortgage rate' used to trigger high-cost loan protections by referencing the average prime offer rate (APOR) published by the CFPB and allowing administrative substitution if APOR is unavailable.
The subcommittee voted to send S780 to the full committee after industry and regulatory witnesses said the bill modernizes the statutory benchmark used to identify high-cost home loans.
Lightbarger and mortgage-industry representatives explained that former net-yield indexes published by Fannie Mae and Freddie Mac have been retired (one retired in 2013; another in 2024), leaving a gap in the calculation used to determine whether a loan is a "high cost home loan" that triggers supplemental consumer protections. The bill uses the CFPB's average prime offer rate (APOR) as the replacement index and allows the administrator to pick a substitute index by order if APOR is not available.
Mortgage Bankers Association regional vice president Bruce Buckless said the change provides a "more modern and reliable index" and helps lenders and consumers determine thresholds and options such as buying down rates.
