If the amortization period of a loan is longer than the term to maturity or the initial, fixed-rate period, as applicable, (the "term") of the loan, i.e. loan has balloon, should the lender use the term or the amortization period...?

Compliance > Regulation C - HMDA > FFIEC FAQs
Q:  If the amortization period of a loan is longer than the term to maturity or the initial, fixed-rate period, as applicable, (the "term") of the loan - i.e., because the loan has a balloon feature - should the lender use the term or the amortization period in determining the applicable average prime offer rate?
 
A:  The term must be used. See 203.4(a)(12). For example, in the case of a fixed-rate loan that has term to maturity of five years and has a balloon payment because the payments are amortized over 30 years, the term of five years must be used. In the case of a variable-rate loan that has a term to maturity of 30 years and whose rate is fixed for five years and then adjusts annually over 25 additional years, the term of five years must be used.
 

This can be found in FFIEC’s FAQs on HMDA-related questions, which can be found at:  http://www.ffiec.gov/hmda/faq.htm

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