After losing data source, bureau turns to ICE to help calculate APORs for mortgages

A revised approach for determining the average prime offer rates (APOR) for purposes of federal mortgage rules was released Friday by the federal consumer financial protection agency.

According to the Consumer Financial Protection Bureau (CFPB), it will begin using Intercontinental Exchange (ICE) Mortgage Technology data and the bureau’s revised methodology to calculate APORs. The change, the bureau said, “will address the upcoming unavailability of certain data the CFPB previously relied on to calculate APORs.”

The new methodology goes into effect beginning April 21, CFPB said.

The revision was made, CFPB said, to address the “imminent unavailability” of certain data the CFPB previously relied on to calculate APORs. The bureau explained the data was unavailable because of a recent decision by Freddie Mac to make changes to its Primary Mortgage Market Survey (PMMS). The CFPB said the use of the ICE data and its own was “a suitable temporary alternative source of the relevant data.”

APORs are annual percentage rates derived from average interest rates, points, and other loan pricing terms currently offered to consumers by a representative sample of creditors for mortgage loans that have low-risk pricing characteristics, the bureau said. The rates are typically calculated from survey data for four hypothetical mortgage products: 30-year fixed-rate, 15-year fixed-rate, five-year variable-rate, and one-year variable-rate.

The bureau said it would continue to post the survey data used to calculate APORs on the website of the Federal Financial Institutions Examination Council (FFIEC) website, and that the CFPB would continue to identify the source of the data on that page.

CFPB Announces Revised Methodology for Determining Average Prime Offer Rates