Two Classes of Qualified Mortgages
Qualified Mortgage and the 3% Cap
The Mini-Correspondent Channel
Mini-Correspondents: A Good Deal?
Mini-Correspondents and the CFPB
*Jonathan Foxx, President & Managing Director
*Michael Barone, Director of Legal & Regulatory Compliance
-Publication: National Mortgage Professional Magazine – September 2013
[i]Elizabeth Warren is now a U. S. Senator (D-MA).
[ii]The 3% cap on broker revenue is included in the Final Rule issued by the CFPB and published in the Federal Register, January 30, 2013, Ability-to-Repay and Qualified Mortgage Standards under the Truth in Lending Act (Regulation Z) at https://www.federalregister.gov/articles/2013/01/30/2013-00736/ability-to-repay-and-qualified-mortgage-standards-under-the-truth-in-lending-act-regulation-z.
[iii]The CFPB issued Proposed Amendments to the Ability to Repay Standards under the Truth in Lending Act (Regulation Z). See Proposed Amendments to the Ability to Repay Standards under the Truth in Lending Act (Regulation Z), January 10, 2013, see http://files.consumerfinance.gov/f/201301_cfpb_concurrent-proposal_ability-to-repay.pdf.
[iv] 78 Fed. Reg. 6447, 6581 (Jan. 30, 2013)
[v] The Final Rule provides a compliance effective date of on or after January 10, 2013, for loans for which the creditor receives an application. See 78 Fed. Reg. 6408, 6419 (Jan. 30, 2013) (12 C.F.R. § 1026.43(c)
[vi] Ability-to-Repay: Regulating or Underwriting, Part I, Foxx, Jonathan, National Mortgage Professional Magazine, June 2011, Volume 3, Issue 6, pp. 26-30; Ability-to-Repay: Regulating or Underwriting, Part II, National Mortgage Professional Magazine, Foxx, Jonathan, July 2011, Volume 3, Issue 7, pp. 20-42; Ability-to-Repay: The Basics and a Chart, Foxx, Jonathan, National Mortgage Professional Magazine, September 2011, Volume 3, Issue 9, pp. 6-24; and, for our Newsletters, visit our Publications website (http://Publications.LendersComplianceGroup.com). More information is available in the firm's online Library (http://LendersComplianceGroup.com).
[vii] The "Average Prime Offer Rate" (APOR), published weekly by the CFOB, is an annual percentage rate that is derived from average interest rates, points, and other loan pricing terms currently offered to consumers by a representative sample of creditors for mortgage transactions that have low-risk pricing characteristics. See 12 CFR Chapter X, Subpart E - Special Rules for Certain Home Mortgage Transactions, §1026.35(a)(2).
[viii] The CFPB has the authority to assess civil monetary penalties in the amount of $5,000 per day for a violation, up to $25,000 per day for any reckless violation, and up to $1 million per day for any knowing violation.
[ix] 78 Federal Register 6531. The Final Rule establishes a five-tier structure in which mortgages of certain loan amounts retain the designation of a QM so long as the total points and fees do not exceed the listed thresholds.
[xi] For instance, see Handbook 4060.1, and numerous Mortgagee Letters. For more information, see also http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/lender/lendappr