Into the ask for Public Comment, OCCR identified the growth, or at the very least the perception of a development, that loan providers had been increasing charges and points to an even just underneath the limit that will qualify that loan as a far more heavily managed high-rate, high-fee “Section 32” loan. We asked commenters to share with us whether this perception had been a real possibility, if what exactly might be done about this.
Our conclusion is the fact that fee-padding is happening in Maine, and also as one good way to deal with the training our company is suggesting (see proposed bill connected as Appendix no. 1, area 2) that the limit of “points and fees” that produces area 32 therapy, be lowered from 8% of that loan quantity, to 5%.
We base this proposition in the presumption that the way to obtain loans in this range (between 5% points and costs, and 8% points and charges) is, in financial terms, “elastic, ” such that developing a brand new, reduced degree will likely not lead to an unwillingness regarding the element of loan providers to really make the majority that is vast of loans that currently fall into the range between 5% points-and-fees, and 8%.