SC Amends Home Loans Law to Refer to Average Prime Offer Rate

South Carolina recently amended the definition of “conventional mortgage rate” in its high-cost and consumer home loans law to refer to the average prime offer rate as defined in Regulation Z and published by the CFPB for comparable transactions, replacing the former reference to the required net yield for a ninety-day standard mandatory delivery commitment from the GSEs. 

Under this new definition, the relevant date used to determine the average prime offer rate for a comparable transaction is the date the lender set the interest rate for the final time before consummation or other final action was taken, regardless of market rate changes.  The amendment now includes that the administrator may issue an order or interpretation adopting a substitute index, if this index is not available.  This change also effects the definition of “threshold” in the law, which now refers to the “conventional mortgage rate,” instead of the same former reference to the required net yield for a ninety-day standard mandatory delivery commitment from the GSEs.

These amendments became effective recently.