On page 17 of the Guide on high-cost mortgages (HOEPA rule), it says to include “Compensation paid by a creditor to retail loan officers: Include the amount the creditor pays to its loan officer employees for their work on the transaction.” in the points and fees calculation, quoting (§1026.32(b)(1)(ii)). But the regulation states as an exemption “(C) That compensation is paid by a creditor to a loan originator that is an employee of the creditor.” Further the Guide on the ATR/QM rules state “Include compensation paid directly or indirectly by a consumer or creditor to a loan originator other than compensation paid by a mortgage broker, creditor, or retailer of manufactured homes to an employee.” Is the Guide on high-cost mortgages simply wrong or incomplete or am I missing something?

The guide has not been updated to reflect the 10/23/13 clarifications of the rule.

The guide is outdated. When the original "final" rule was issued LO comp to employees was counted in the test, but they asked for comments on that portion and then amended the Reg with another "final" rule excluding it.

It was actually the 6/12/13 HOEPA Amendments that removed creditor payments to loan originators from points and fees. See 78 FR 35430 (6/12/13)(http://www.gpo.gov/fdsys/pkg/FR-2013-06-12/pdf/2013-13173.pdf)

The current version was updated in December 2013 to correct this. However, be careful if you are searching for it directly through a search engine, as the May 2013 version is still available on the website and is the first hit!