Within the ask for Public Comment, OCCR identified the growth, or at least the perception of the development, that loan providers had been increasing costs and points to an even just beneath the limit that could qualify that loan as an even more heavily controlled high-rate, high-fee “Section 32” loan. We asked commenters to share with us whether this perception ended up being a real possibility, if just what exactly could possibly be done about this.
Our conclusion is the fact that fee-padding is occurring in Maine, so that as one method to deal with the training we have been suggesting (see proposed bill attached as Appendix no. 1, part 2) that the limit of “points and fees” that creates part 32 therapy, be lowered from 8% of financing quantity, to 5%.
We base this proposal from the assumption that the method of getting loans in this range (between 5% points and costs, and 8% points and fees) is, in financial terms, “elastic, ” such that developing an innovative new, reduced degree will likely not lead to an unwillingness regarding the section of loan providers to really make the majority that is vast of loans that currently fall within the range between 5% points-and-fees, and 8%. Read more