The National Association of Realtors and Mortgage Bankers Association have concerns about the 3% cap on points and fees and its impact on affiliated transactions and loan origination compensation.
But they are not ready to go to Congress for a legislative fix.
“We will continue to work closely with the CFPB to ensure that the cap on fees doesn’t restrict consumers’ mortgage options, but believe today’s QM rule is a positive step to bringing certainty to the housing finance system,” said NAR president Gary Thomas.
The QM rule establishes the “ability to repay” underwriting standards mandated by the Dodd-Frank Act. And points and fees on QM loans cannot exceed 3% of the loan amount.
Industry groups want fees charged by affiliated title companies excluded from the 3% cap. Title company fees are regulated at the state level.
They are also concerned about the double counting of originator compensation. In a broker transaction, the fee the mortgage broker firm receives from the wholesaler is counted toward the 3% cap. When the brokerage firm turns around and pays its loan officer that compensation is counted toward the 3% cap, too.
In adhering to the legislative language of the DFA, CFPB has given retail originators a huge pricing advantage over the broker channel.
“The 3% cap on points and fees appears to be overly inclusive as it relates to compensation and affiliates,” according to MBA chairman Debra Still.
“Loans with the same interest rate, terms and out-of-pocket costs should be treated the same under the rule regardless of the organizational structure or business model of the lender.”
The MBA is taking comfort in the fact that the CFPB will be seeking public comment on loan origination compensation after the final QM rule is issued.
The CFPB was expected to release the QM rule early Thursday morning. As of 2 p.m., the regulation had not been released.