The qualified mortgage rule might force lenders to use salaried loan officers to stay within the 3% cap on points and fees.
“You can’t cram all the fees into points and fees,” according to Mitch Kider, chairman and managing partner at Weiner Brodsky Sidman Kider PC.
The Consumer Financial Protection Bureau counts commissions paid to LOs towards the cap as well as loan level price adjustments the GSEs charge on loans. In addition, there are an assortment of other fees such as appraisal and affiliated title fees.
“They are moving the industry toward salaried loan officers if the rule stays the way it is now,” Kider said Thursday at an American Bankers Association conference.
“You can handle LLPAs by raising the interest rate,” he added. But lenders can’t raise the rate too much or the
Once the LLPA is built into the interest rate, the lender can use one or two “bona fide discount points to buy down the interest rate,” Kider explained.
Bodman PLC member Howard Lax said the QM rule doesn’t count salaries, hourly pay and annual bonuses toward the points and fees cap.
“You can restructure things and create different bonuses—based on pull-through rate or the performance of loans for the first year,” he said at the ABA’s real estate lending conference in New Orleans.
However, these bonuses must be part of a consistent compensation plan and meet CFPB’s record keeping requirements for LO compensation, he said.
