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CFPB Issues Proposed Amendments to Qualified Mortgage Points and Fees

Published on Wednesday, April 30, 2014 in Client and Friends Memo, TILA, QM/Ability to Repay

Today the CFPB issued proposed amendments to the Qualified Mortgage points and fees requirement in §1026.43(e)(3) to permit, under limited circumstances, the refunding of  excess points and fees within 120 days after closing in order for the loan to meet this Qualified Mortgage requirement (click here). Once the proposal is published in the Federal Register, we will advise you by subsequent memorandum so that you will be able to submit comments on it to the CFPB.

 The text of the proposed amendments and their proposed official interpretations are set out below:

(3) Limits on points and fees for qualified mortgages. (i) Except as provided in paragraph (e)(3)(iii) of this section, a covered transaction is not a qualified mortgage unless the transaction’s total points and fees, as defined in §1026.32(b)(1), do not exceed:
* * * * *
(iii) If the creditor or assignee determines after consummation that the total points and fees payable in connection with a loan exceed the applicable limit under paragraph (e)(3)(i) of this section, the loan is not precluded from being a qualified mortgage, provided:
     (A) The creditor originated the loan in good faith as a qualified mortgage and the loan otherwise meets the requirements of paragraphs (e)(2), (e)(4), (e)(5), (e)(6), or (f) of this section, as applicable;

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