High Cost Mortgages (HCM)

A loan is considered a high-cost mortgage if it is a consumer credit transaction that is secured by the consumer's principal dwelling (with a few minor exclusions) and one or more of the following conditions are met:

1. the APR test fails;
2. the points and fees test fails; or
3. the prepayment penalty test fails.

The HCM module will determine if an already computed loan is considered a high-cost mortgage. The calling application must furnish the SCE with the required information, and then the SCE will perform the three required tests mentioned above, returning the loan's status in its output.

Please note that the HCM module requires the use of the Average Prime Offer Rates (APOR) tables, which are published weekly by the federal government. The two files (one for fixed rates and one for adjustable rates) are available for download at this web site. Please note that it is necessary that these files be updated weekly, or else the SCE will not be able to determine if a loan is a HCM for loans whose lock in dates fall outside the range of dates provided in the APOR files. If you are using a version of the SCE that is hosted by J. L. Sherman and Associates, Inc., then the APOR files will be automatically updated weekly for your use.

Also note that there are two values specified in the HCM points and fees test which will adjust annually. These values are stored in a file named hcm.ini. This file needs to be located in the same directory as the APOR files mentioned above. Similar to the APOR files, this file will be updated automatically for your use if you are using a version of the SCE which is hosted by J. L. Sherman and Associates, Inc.

Sample Request

The following is a sample SCE request for a Hcm calculation:

{
  "Module" : "Hcm",
  "Data" : {
    "LockInDate" : "2022-03-09",
    "LienType" : "first",
    "RateType" : "fixed",
    "Dwelling" : "personal_property",
    "Term" : "360",
    "PPY" : "12",
    "LoanAmount" : "255102.04",
    "AmountFinanced" : "255102.04",
    "Apr" : "9.91",
    "FinanceCharge" : "292688.40",
    "InterestCharge" : "266366.36",
    "FederalStatePremiumsFees" : "0",
    "PMI" : {
      "After" : "20625.00",
      "AtOrBefore" : "625.00",
      "MaxAllowedAtOrBefore" : "7653.06"
    },
    "ThirdPartyCharges" : "0.00",
    "DiscountPoints" : {
      "Points" : "2.0",
      "FullRate" : "6.000",
      "Fee" : "5102.04"
    },
    "LoanOriginatorFees" : "0.00",
    "RealEstate" : {
      "Fees" : "0.00",
      "FinanceAmt" : "0.00"
    },
    "CreditInsurance" : {
      "Premiums" : "0.00",
      "FinanceAmt" : "0.00"
    },
    "PrepaymentPenalty" : {
      "Max" : "0.00",
      "Total" : "0.00",
      "FinanceAmt" : "0.00",
      "After36Months" : false,
      "AmountPrepaid" : "0.00"
    }
  }
}

Sample Response

{
    "Result": 200,
    "Module": "Hcm",
    "Data": {
        "Errors": [],
        "Warnings": [],
        "IsHcm": false,
        "Triggers": {
            "Apr": false,
            "PointsFees": false,
            "Prepayment": false
        },
        "AprTrigger": {
            "Date": "2022-03-07",
            "Apor": "3.830",
            "Spread": "6.500",
            "Difference": "-0.420"
        },
        "PointsFeesTrigger": {
            "TotalLoanAmount": "255102.04",
            "TotalPointsFees": "5072.04",
            "MaxPointsFees": "12755.10"
        },
        "PrepaymentTrigger": {
            "After36Months": false,
            "Total": "0.00",
            "Max": "0.00"
        }
    }
}