Brad Miller: “title III hardly turns all subprime loans into HOEPA loans. HOEPA loans are very high-cost loans, loans with a very high…”

“title III hardly turns all subprime loans into HOEPA loans. HOEPA loans are very high-cost loans, loans with a very high interest rate. For first loans, it is 8 percent above the Treasury rate, which works out to about 13 percent. Or for subordinate loans, second or third mortgages, it is 10 percent above, which is more like a 15 percent interest rate. In contrast, this legislation before us, the other provisions of the legislation, the other titles, treats the subprime loans as loans with an interest rate of about 8.5. So there is plenty of room between 8.5 or 13 or 15. Mr. Chairman, it is simply not true that this legislation in North Carolina has created a problem with lending in North Carolina. We have heard it again and again in the Financial Services Committee for 4 or 5 years. We have heard repeatedly testimony by the North Carolina Commissioner of Banks, Joe Smith, who has said there is a ready availability of credit in the subprime market in North Carolina, and that it is no more expensive than it is anywhere else that he knows of. We have heard from witnesses from industry who have said repeatedly they have been able to lend in North Carolina on the same terms and at the same rates as everywhere else, and they have been able to do so profitably.”