Any suggestions on where to find a good "in-depth" explanation of the BFDP rule and exclusions under the points and fees test?

A link would be very appreciated as I'm a little in the weeds navigating around the CFPB site.

I'm not sure what you mean. Either you offer a borrower the option to pay points to lower their interest rate or you do not.

After that, it is just a comparison to the APOR and reviewing collateral type.

Appreciate the response, and sure, that part makes sense.

I guess coming from the legal side I thought there might be more annotations, commentary and examples somewhere, in addition to the regulatory text, to show how the BFDP rule works in practice.

Well, there is additional discussion in the preamble to the final rules. It goes a little farther than the regulation and commentary.

Some background on bona fide discount points:

In 2009 Freddie Mac and Fannie Mae provided guidance on what could be considered “bona fide” discount points. In the Freddie Mac industry letter of February 9th, Freddie Mac provided the following definition:

“• Bona fide discount points, which are loan discount points that:
o Are knowingly paid by the Borrower
o Are funded through any source for the purpose of reducing the interest rate on the mortgage
o Result in a meaningful reduction of the interest rate on the mortgage, provided that, prior to discount, the rate was consistent with current industry norms based on the credit characteristics of the mortgage
It will be presumed that a point is a bona fide discount point if it reduces the interest rate by a minimum of 25 basis points or ¼ of a point provided all other terms of the loan remain the same
No more than two bona fide discount points will be excluded from the points and fees calculation”

Then in early 2013, the CFPB in 1026.32(b)(3(i) referenced Freddie Mac and Fannie Mae for determining if a discount point is “bona fide.”

Subsequently on October 1st, 2013, Freddie Mac issued an Industry Letter titled Information Relating to the CFPB Final Rule on Ability to Repay in which they wrote:

“In light of the CFPB final rule, some of the direction we provided in our February 12, 2009 Industry Letter on anti-predatory lending requirements is no longer operative. Accordingly, we are withdrawing the guidance contained in the "Excessive Points and Fees" section (including the "Charges Included in the Points and Fees Calculation" and "Charges Excluded from the Points and Fees Calculation" subsections) and the "Pass-Through of Freddie Mac Delivery Fees" section of that Industry Letter, including the instructions on bona fide discount points.”

My understanding is that originally Wells Fargo said they would include all discount points in the points and fees but as of now I believe they have relented and will allow up to 2 bona fide points to not be included (provided they meet the requirements of 1026.32.

Stay tuned!