Have any of you CRA Wiz users had a problem with getting quality edit telling you a particular loan shoud be a HOEPA loan when it really is not?

I have been getting a Q44 saying that my HOEPA status should be 1. I have double/triple checked everything and can't figure out why I am getting this edit

Bueller...Bueller...

I've never used CRA Wiz, but our former software used to give us that error on 2nd lien loans - is there any chance that's the problem? Otherwise, it may be a timing issue - the treasury dates used for HOEPA and for the HMDA rate spread are different.

I have checked and rechecked the dates, the rates, I can't figure out what the problem is. I did find out that the LO used the wrong date for the treasury rate but the correct date put it even further away from being a HOEPA so I don't get it

Maybe you're right and it is a timing issue?? If so what should I do? Right now I just have it noted on my edit report stating that I confirmed our calculations are correct.

Did you check the lien status? Are these 2nd lien deals that Wiz is applying 1st lien criteria to?

Have you tried running your file through the free FFIEC software? That might tell you if the problem is with Wiz or with your data.

It's a first lien.

Hmmm, I haven't tried running thru the FFIEC program. That's an idea, will have to down load it though....I think I'll try it and see what happens. I'll let you know.

Thanks hmdagal!

I have found the tech support at CRA wiz to be great - have you called them to see if they can tell you what may be causing the problem?

No not yet. I'm getting ready get out of here for a long weekend....so I've been wrapping up some other things and this situation wasn't on top of my list for the day!

I'll have to work on this Tuesday when I re-chain myself to the desk.

Whoops, itchy trigger finger, posted that one twice!

I think I may have gotten that once. If you check it and it isn't an error then I wouldn't worry about it. Is your rate spread high? Make sure that HOEPA even applies. It won't if it is a business loan.

KC, HOEPA would apply to this loan, unfortunately.

I documented it on our quality edit report. The rate spread was a 8.13 but when we fill in the APR info on the HOEPA worksheet it says that this is not HOEPA.

I called the folks at Wiz & they say it should be HOEPA

It isn't necessarily a HOEPA loan - it could go back to a timing issue. For HOEPA, you look at the Treasury rates on the 15th of the month prior to the date the application was taken. For HMDA rate spread purposes, you look at the Treasury rates in effect on the 15th just before the rate lock date.

For example, if you take an application today (May 28th), and lock the rate today, for HOEPA purposes you would use the Treasury rates as of April 15th. For HMDA rate spread purposes, you would use the rates as of May 15th. This could cause a HMDA rate spread to exceed the HOEPA threshhold, but you would not have a HOEPA loan.

Whoa.

Your index may not be the same for HOEPA as it is for HMDA. It is possible your spread for HMDA could be 8.13 but your spread for HOEPA would be below the 8% threshold for a first lien loan.


HMDA uses the constant treasury index as of the 15th of the month prior to the final rate being set. HOEPA uses the constant treasury index as of the 15th of the month preceding the month in which the application was received. Therefore you are most likely comparing your spread to two separate index figures.

Double check your HOEPA calculation. I don't use CRA Wiz but based on your post I'm not convinced that you "absolutely" have a HOEPA loan because your HMDA spread in 8.13. You have to make sure the proper index is being used for each calculation.

We have these pop up from time to time. I document the APR/fee info that declares it *not* HOEPA, then put in my HMDA rate spread and ignore the Q edit. We've been OK so far (4 years I've been in this office).

Thanks hmdagal & Dan, that makes more sense as to why I am having this problem. This may be the reason there is a discrepancy. I have triple checked the calculation for HOEPA and I'm sticking to my guns...not HOEPA.

Becka, thanks too, it makes me feel better to know that I'm not the only one. I'm going to ignore it too.