Ffiec Rate Spread Calculator

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FFIEC Rate Spread Calculator

The FFIEC (Federal Financial Institutions Examination Council) Rate Spread is a metric used to assess whether a loan's interest rate is considered fair compared to prevailing market rates for similar loans. It helps identify potential predatory lending practices.

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function calculateRateSpread() { var appraisedValue = parseFloat(document.getElementById("appraisedValue").value); var loanAmount = parseFloat(document.getElementById("loanAmount").value); var pointsFees = parseFloat(document.getElementById("pointsFees").value); var annualPercentageRate = parseFloat(document.getElementById("annualPercentageRate").value); var treasuryIndex = parseFloat(document.getElementById("treasuryIndex").value); var errorMessages = []; if (isNaN(appraisedValue) || appraisedValue <= 0) { errorMessages.push("Appraised Value must be a positive number."); } if (isNaN(loanAmount) || loanAmount <= 0) { errorMessages.push("Loan Amount must be a positive number."); } if (isNaN(pointsFees) || pointsFees < 0) { // Points and fees can be 0 errorMessages.push("Points and Fees cannot be negative."); } if (isNaN(annualPercentageRate) || annualPercentageRate < 0) { // APR can be 0 in rare cases, but usually positive errorMessages.push("Annual Percentage Rate (APR) cannot be negative."); } if (isNaN(treasuryIndex) || treasuryIndex 0) { document.getElementById("result").innerHTML = "Errors:" + errorMessages.join("") + ""; return; } // Calculate the estimated APR based on the Treasury Index and points/fees // This is a simplified model for demonstration. Actual FFIEC calculations may involve more complex adjustments. // FFIEC typically compares the loan's APR to a benchmark rate derived from Treasury yields, // adjusted for loan terms, loan-to-value, and points/fees. // A common benchmark is the yield on a comparable Treasury security plus a margin. // For this calculator, we'll use a simplified approach: Treasury Index + a standardized margin + points/fees equivalent. var loanToValueRatio = (loanAmount / appraisedValue); var ltvMargin = 0; // Default margin for LTV if (loanToValueRatio >= 0.8) { ltvMargin = 2.0; // Example margin for LTV >= 80% } else if (loanToValueRatio >= 0.7) { ltvMargin = 1.5; // Example margin for 70% <= LTV < 80% } else { ltvMargin = 1.0; // Example margin for LTV < 70% } var pointsAndFeesAsPercentage = (pointsFees / loanAmount) * 100; var benchmarkRate = treasuryIndex + ltvMargin + pointsAndFeesAsPercentage; var rateSpread = annualPercentageRate – benchmarkRate; var resultHtml = "

Calculation Results:

"; resultHtml += "Loan-to-Value (LTV) Ratio: " + loanToValueRatio.toFixed(2) + ""; resultHtml += "Applicable LTV Margin: " + ltvMargin.toFixed(2) + "%"; resultHtml += "Points and Fees as % of Loan Amount: " + pointsAndFeesAsPercentage.toFixed(3) + "%"; resultHtml += "Estimated Benchmark Rate: " + benchmarkRate.toFixed(3) + "%"; resultHtml += "Rate Spread: " + rateSpread.toFixed(3) + "%"; if (rateSpread > 2.0) { // General guideline, actual thresholds vary and are complex resultHtml += "Note: A rate spread greater than 2.0 percentage points may warrant further review by regulatory standards."; } else if (rateSpread < 0) { resultHtml += "Note: The APR is below the estimated benchmark rate."; } else { resultHtml += "Note: The rate spread appears within typical ranges."; } document.getElementById("result").innerHTML = resultHtml; } .calculator-container { font-family: Arial, sans-serif; max-width: 600px; margin: 20px auto; padding: 20px; border: 1px solid #ccc; border-radius: 8px; box-shadow: 0 2px 5px rgba(0, 0, 0, 0.1); } .calculator-container h2 { text-align: center; margin-bottom: 20px; color: #333; } .calculator-container p { color: #555; line-height: 1.6; margin-bottom: 15px; } .inputs { display: grid; grid-template-columns: repeat(auto-fit, minmax(200px, 1fr)); gap: 15px; margin-bottom: 20px; } .input-group { display: flex; flex-direction: column; } .input-group label { margin-bottom: 5px; font-weight: bold; color: #444; } .input-group input[type="number"] { padding: 10px; border: 1px solid #ccc; border-radius: 4px; font-size: 1em; width: calc(100% – 20px); /* Account for padding */ } .input-group input[type="number"]::-webkit-outer-spin-button, .input-group input[type="number"]::-webkit-inner-spin-button { -webkit-appearance: none; margin: 0; } .input-group input[type="number"] { -moz-appearance: textfield; } button { display: block; width: 100%; padding: 12px 20px; background-color: #007bff; color: white; border: none; border-radius: 5px; font-size: 1.1em; cursor: pointer; transition: background-color 0.3s ease; margin-top: 10px; } button:hover { background-color: #0056b3; } #result { margin-top: 25px; padding: 15px; border: 1px solid #eee; background-color: #f9f9f9; border-radius: 5px; } #result h3 { margin-top: 0; color: #333; } #result p { margin-bottom: 8px; }

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