HPML

Higher priced mortgage loan. This term was created by an amendment to TILA. Regulation Z defines a higher-priced mortgage loan (HPML) as a consumer credit transaction secured by the consumer’s principal dwelling with an APR that exceeds the average prime offer rate (APOR) for a comparable transaction as of the date the interest rate is set, by 1.5 or more percentage points for loans secured by a first lien, or by 3.5 or more percentage points for loans secured by a subordinate lien. (The escrow account requirements also employ a separate threshold of 2.5 percentage points over APOR for “jumbo” mortgages, but this is not relevant for FHA loans.) A higher priced mortgage loan is different from a higher risk mortgage loan.