Skip to content
BOL Conferences
Thread Options
#1791569 - 03/05/13 07:31 PM 3% Points & Fees
OldSchoolBanker Offline
Platinum Poster
Joined: May 2005
Posts: 662
FL
We do not have any affiliate providers such as title or appraisal. Do I read correctly that if the provider is not affiliated AND we are passing through only the actual fees from the vendor AND they are bona-fide, then the fee is excluded from the Points and Fees test?

I realize the typical APR fees are included excluding prepaid interest. Has anyone seen any good sample worksheets yet on this calculation?

Thanks to the Board!
_________________________
Old School Banker

Return to Top
Ability to Repay/Qualified Mortgage Rule
#1792224 - 03/07/13 11:32 AM Re: 3% Points & Fees OldSchoolBanker
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
You are correct. I have not seen a worksheet yet.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1792336 - 03/07/13 04:23 PM Re: 3% Points & Fees OldSchoolBanker
Still Smiling Offline
Platinum Poster
Joined: Nov 2007
Posts: 767
Am I reading this right?

If you have an affiliate that provides closing services that it must be included in points and fees even if the fees are bona fide?
_________________________
Comments are strictly my own and not that of my employer.

Return to Top
#1792355 - 03/07/13 04:45 PM Re: 3% Points & Fees OldSchoolBanker
NotDoneYet Offline
Gold Star
NotDoneYet
Joined: Jul 2010
Posts: 482
PA
That's how I am reading it.

Return to Top
#1793393 - 03/11/13 05:45 PM Re: 3% Points & Fees OldSchoolBanker
OldSchoolBanker Offline
Platinum Poster
Joined: May 2005
Posts: 662
FL
Still Smiling - You may want to change your name. This would put a frown on my face for sure. Yes, appraisals, title insurance premiums, etc obtained from an affiliate are all part of the 3% Points and Fees test under the QM rule.
_________________________
Old School Banker

Return to Top
#1793709 - 03/12/13 03:06 PM Re: 3% Points & Fees OldSchoolBanker
zitch70 Offline
Gold Star
Joined: Apr 2001
Posts: 331
Edinburg, Texas
would hazard insurance, & flood insurnace obtained from an affiliate be included in the points and fees?

Return to Top
#1793957 - 03/12/13 08:23 PM Re: 3% Points & Fees OldSchoolBanker
Still Smiling Offline
Platinum Poster
Joined: Nov 2007
Posts: 767
old school...I think I need to at least add the cry face...dont you!
_________________________
Comments are strictly my own and not that of my employer.

Return to Top
#1793969 - 03/12/13 08:35 PM Re: 3% Points & Fees OldSchoolBanker
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
would hazard insurance, & flood insurnace obtained from an affiliate be included in the points and fees?

I see no exclusion.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1797857 - 03/24/13 09:31 PM Re: 3% Points & Fees OldSchoolBanker
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,601
Ohio
We are trying to figure out how to interpet this statement:

exclude from points and fees ‘‘bona fide third party charges not retained by the mortgage originator, creditor, or an affiliate of the creditor or mortgage originator.

Line 1107 is used to record the amount of the total title insurance premium, including endorsements, that is retained by the title agent. This amount is recorded outside of the columns.

Line 1108 used to record the amount of the total title insurance premium, including endorsements, that is retained by the title underwriter. This amount is recorded outside of the columns.

We own 49% of a title company so we understand as an affliate that the fees have to be included but we are trying to figure out "retained". The TC retains the search fee, binder and only 20% of the title insurance (the other 80 goes to the underwriter, First American, which is not our affilate), so we are thinking that we only have to included the search fee, binder and the 20%?

Return to Top
#1797862 - 03/25/13 10:31 AM Re: 3% Points & Fees OldSchoolBanker
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Do they not count the whole amount as revenue and the amount they pay to First American as an expense?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1798031 - 03/25/13 05:03 PM Re: 3% Points & Fees OldSchoolBanker
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,601
Ohio
I don't know, is that how it normally works?

Return to Top
#1811951 - 05/07/13 09:01 PM Re: 3% Points & Fees OldSchoolBanker
cle Offline
100 Club
Joined: Jan 2004
Posts: 161
We own a 6% interest in a title company. Would this relationship be considered an affiliate for the points and fees test?

Return to Top
#1811987 - 05/07/13 10:16 PM Re: 3% Points & Fees cle
ComplianceDiva1 Offline
New Poster
Joined: May 2012
Posts: 14
Clarksville, TN
I just attended a PBS seminar on the new regulations and this question was asked. PBS says NO, you would need to have at least a 25% ownership or more to count the affiliant in the points and fees test.

Return to Top
#1822546 - 06/11/13 07:26 PM Re: 3% Points & Fees OldSchoolBanker
Still Smiling Offline
Platinum Poster
Joined: Nov 2007
Posts: 767
ComplianceDiva1...this is what I initially thought, but it also mentions recieving direct or indirect compensation...so i am still not sure.
_________________________
Comments are strictly my own and not that of my employer.

Return to Top
#1824436 - 06/18/13 01:58 PM Re: 3% Points & Fees jlroberts
Need Coffee Offline
Member
Need Coffee
Joined: Mar 2012
Posts: 69
Down South
Originally Posted By: jlroberts
We are trying to figure out how to interpet this statement:

exclude from points and fees ‘‘bona fide third party charges not retained by the mortgage originator, creditor, or an affiliate of the creditor or mortgage originator.

Line 1107 is used to record the amount of the total title insurance premium, including endorsements, that is retained by the title agent. This amount is recorded outside of the columns.

Line 1108 used to record the amount of the total title insurance premium, including endorsements, that is retained by the title underwriter. This amount is recorded outside of the columns.

We own 49% of a title company so we understand as an affliate that the fees have to be included but we are trying to figure out "retained". The TC retains the search fee, binder and only 20% of the title insurance (the other 80 goes to the underwriter, First American, which is not our affilate), so we are thinking that we only have to included the search fee, binder and the 20%?


I know this is old but, if you are correct in the split, you need to renegotiate your contract with the underwriter. Typically, it is 80/20 the other way. The agency retains 80%. The agency has the vast majority of the overhead and a sizeable portion of the risk. I am not aware of any relationship lower than 60%. I hope you have it backwards.
_________________________
My opinions are simply that, my opinion.

Return to Top
#1825318 - 06/19/13 09:22 PM Re: 3% Points & Fees rlcarey
ForceFull1 Offline
Gold Star
ForceFull1
Joined: Nov 2003
Posts: 250
smalltown Iowa
Originally Posted By: rlcarey
would hazard insurance, & flood insurnace obtained from an affiliate be included in the points and fees?

I see no exclusion.


I'm jumping back in time a couple months.

I asked this question at a recent Pegasus seminar and was told hazard and/or flood insurance from an affiliate would not be included in the points and fees total. In new 1026.32(b)(1) points and fees includes finance charges with some exclusions and the items listed in 1026.4(c)(7). Property insurance is listed in 1026.4(d)(2). So therefore it should NOT be included in points and fees, correct?

Return to Top