I'm probably "over-thinking" this, but here the question:
The CA Predatory Lending Law eff. 7/1 has in its definition of a covered loan "points & fees paid by the borrower" . However, in the definition of "points and fees" they make particular mention of "all compensation paid to a broker". I'm confused as to whether they're including lender-paid broker fees in this calculation, too. Has anyone been closer to this legislation to know? Thanks!

I don't have much information on the state law but Oakland's predatory ordinance included the following in the definition of points and fees. I don't know if the state's intent was to mirror this definition or Oakland was trying to mirror the state.

Points and fees mean the following:

(3) All compensation not otherwise specified in this definition paid directly or indirectly to a mortgage broker, including a broker that originates a home loan in its own name through an advance of funds and subsequently assigns the home loan to ther person advancing the funds.

It also referenced points and fees under 226.4(a) & 226.4(b) of Title 12 of CFR as well as other definitions.

Sorry I couldn't offer more input.

Shelley, are you the author of the Predatory Lending document in Bankers Tools? It is great, but I wondered if it has been updated.

In general we are excluding YSPs and that sort of lender-paid compensation unless the state law specifically references it. The only two that are doing that at the moment that I know of are Illinois and Georgia. So for California, we don't consider YSPs in the P&F calculation. Our legal dept's view is that the point of the law is to calculate points and fees paid by the BORROWER, rather than ALL P&F paid, unless it's specifically stated otherwise.

Just my 2 cents!