The New York Department of Financial Services (Department) issued an industry letter mandating the use of the national average commitment rate when determining whether a home loan qualifies as “subprime.” New York Banking Law currently references Freddie Mac’s breakout figures for the northeast region. However, as of January 1, 2016, Freddie Mac no longer publishes regional breakout figures in the weekly PMMS for the 30-year fixed rate mortgage, the 15-year fixed rate mortgage, and the 5/1 hybrid adjustable rate mortgage, and no longer provides figures for the 1-year adjustable rate mortgage. As such, the Department has designated the PMMS average commitment rate for all loans in the United States as the appropriate threshold for determining which loans qualify as “subprime home loans” in the State of New York. In addition, the Department has designated the 1-year Average Prime Offer Rate published by the Federal Financial Institutions Examination Council as the appropriate metric for calculating the subprime threshold for loans with a fixed rate of less than three years.
See New York Department of Financial Services website for the full text of the Industry Letter
