We are going through and finalizing all of our forms and procedures for TRID and I'm stuck on one - the definition of a pre-payment penalty.
The ATR-QM guide from CFPB says that the definition of pre-payment penalty does not include certain bona fide third-party charges that are waived at consummation. That's exactly what I have on our equity products. We call them Recapture Fees and will only charge them in the event that the borrower pays off the loan in less than 24 months.
Now for TRID - the LE and CD - would that be considered a pre-payment penalty? My LOS allows me to say that certain product have a pre-payment penalty, and then allows me to code that only fees paid by the lender are included, and for 24 months. This information does print on the LE and CD, but I wonder if it needs to be there or not.