Financial Institutions have been calculating the total of points and fees for
years to determine whether a transaction is a high-cost mortgage loan (Section
32). Most lenders have few, if any, high-cost mortgages so calculating the
points and fees has not been a high priority.
But now the game
The calculation of points and fees is changing. The
calculation is both more important and more complex.
importance of the calculation is attributable to:
- The volume of high-cost mortgages is expected to increase as a result of the new calculation and lower thresholds.
- The number will soon be reported on the HMDA LAR.
- The number will be used to calculate a fee cap for certain options to verify the borrower's ability-to-repay.
The increased complexity is
attributable to an expansion of the definition of the total of points and fees.
As a result it is not enough to know how to calculate the number; now it is also
important to understand how to manage the number.
The calculation of points and fees has never
been more important or complex. This program explains when and how the
points and fees are calculated and how to manage the number.
Participants receive a detailed manual that serves as a handbook long
after the program is completed.
completion of this two-hour program, participants understand:
- What items are included in the calculation of points and fees;
- What items may be excluded from the calculation;
- When and how is the total of points and fees is used;
- How to manage points and fees to avoid fee cap violations under the:
- "Standard mortgage" rules contained in Section 1026.43(d)(1)(ii);
- "Qualified mortgage" rules contained in Section 1026.43(e)(2);
- "Qualified mortgage - Interim Rules" rules contained in Section 1026.43(e)(4)(i);
- "Small creditor portfolio loan" rules contained in Section 1026.43(e)(5)(i);
- "Temporary balloon-payment qualified mortgage" rules contained in Section 1026.43(e)(6)(i); and
- "Balloon-payment qualified mortgage" rules contained in Section 1026.43(f)(1).
WHO SHOULD ATTEND:
program is designed for managers, loan originators, loan officers, lending
assistants, compliance officers, auditors and others with responsibilities
related to originating mortgage loans.
Calculating Points and Fees
Questions and Answers