Posted By: Bec
Points and Fees exclusion in compliance guide - 10/28/13 07:13 PM
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.
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.