New York issued guidance regarding discontinued publication of Primary Mortgage Market Survey (PMMS) rate for 5/1 adjustable rate mortgage loans (ARMS). Under New York Banking Law § 6-m, lenders must use the weekly PMMS rate published by Freddie Mac to assess whether a home loan qualifies as a subprime loan. On November 17, 2022, Freddie Mac discontinued publication of the PMMS rate for 5/1 ARMs. As such, the New York Department of Financial Services designated the Average Prime Offer Rate for 5/1 ARMs as the replacement benchmark lenders must use for calculating the subprime threshold for an ARM with an initial rate that is fixed for at least 3 years. The guidance is retroactive to November 17, 2022, the first day on which Freddie Mac ceased publication of the 5/1 ARM rate.
Click to view the NY Subprime Law Requirement and Discontinued Publication of PMMS: https://www.tenaco.com/wp-content/uploads/2022/12/NY-Subprime-Law-Requirement-and-Discontinued-Publication-of-PMMS-12-28-22.pdf
