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#1865697 - 10/28/13 07:13 PM Points and Fees exclusion in compliance guide
Bec Offline
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Bec
Joined: Jul 2010
Posts: 1,114
The Great White North
Can anyone make sense of this paragraph? It is the second bullet point on page 38 of the small entity compliance guide for the Ability to repay and Qualified Mortgage rule. This has to do with Points and Fees and it is included in the exclusions under "finance charges".
Thanks!
A charge paid by a third party may be included in points and fees, but is not included in points and fees under § 1026.32(b)(1)(i) if the exclusions to points and fees in § 1026.32(b)(1)(i)(A) through (F) apply. For example, seller’s points are not included in points and fees under § 1026.32(b)(1)(i) as they are not included in the finance charge. But they still may be included in points and fees under § 1026.32(b)(1)(ii) through (vi) – for example, if they cover loan originator compensation, credit life insurance premiums, or a prepayment penalty.
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Ability to Repay/Qualified Mortgage Rule
#1865707 - 10/28/13 07:27 PM Re: Points and Fees exclusion in compliance guide Bec
Bec Offline
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Bec
Joined: Jul 2010
Posts: 1,114
The Great White North
OK, so I reread the commentary and I think I understand. Could someone just let me know if I am thinking rightly?
This paragraph to me suggests that some points and fees paid by a third party are subject to the inclusions and exclusions of 1026.32(b)(1). They are excluded if they meet the criteria of being excluded but they are not excluded from what is normally included just because a third party pays them?
Last edited by Bec; 10/28/13 07:41 PM.
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#1865845 - 10/29/13 01:21 PM Re: Points and Fees exclusion in compliance guide Bec
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
Sounds right to me.
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#1865873 - 10/29/13 02:20 PM Re: Points and Fees exclusion in compliance guide Bec
Bec Offline
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Bec
Joined: Jul 2010
Posts: 1,114
The Great White North
Phew
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