There is a note: "We are now being told by
several legal sources that affiliate title companies fees for broker don't need
to be counted in the 3% fee rule for QM. Are you hearing anything about
this? We were told only lenders, correspondents and table funders needed to
count the affiliate title fees into the 3% fee rule. When management
heard this from inside and outside counsel we concluded that it doesn't make
any sense that brokers would be excluded from that rule. We are also
hearing from one of our brokers, when we informed then they needed to
restructure a loan because it didn't met the QM standard, they said other
lenders are not counting those fees toward the 3% rule."
The CFPB discounts that notion, and requests lenders to take a look at the actual language of
the definition of points and fees for closed-end mortgages, which is found in 1026.32(b)(1);
specifically, 32(b)(1)(iii)(C) is what's relevant here (and even more
specifically, see the words within that paragraph that should be regarded): (b)
Definitions. For purposes of this subpart, the following definitions
apply: (1) In connection with a closed-end credit transaction, points and
fees means the following fees or charges that are known at or before
consummation...(iii) All items listed in §1026.4(c)(7) (other than amounts held
for future payment of taxes), unless: (A) The charge is reasonable; (B) The
creditor receives no direct or indirect compensation in connection with the
charge; and (C) The charge is not paid to an affiliate of the creditor;".
Yes, it appears that means that fees paid to affiliates of brokers aren't
included in the Points and Fees test unless they otherwise would.
Keeping on with regulations, Illinois has adopted
several changes to the registration fee requirements for loan originators. The
changes included the addition of an exempt entity registration fee,
constituting a $657 increase from $2,043 to $2,700 annually. This fee is broken
down into an investigation fee and initial application fee. Nicole Legere of
Bankers Advisory writes, "The applicant must pay a $1,500 dollar
non-refundable investigation fee which is an increase from the prior fee of
$1,135 dollars. The applicant must also pay an initial license fee of $1,200
dollars which is an increase from the prior fee of $908 dollars. These fees can be paid separately or as a
singular combined fee based on the discretion of the Director of the Division
of Banking. Applicants for license renewal will face the same overall increase
in fees as the annual licensing fee is being raised to $2,700 dollars."
These changes have already been implemented.
The
Washington State Department of Financial Institutions writes, "It
has come to our attention that clarification is needed on the following rule
WAC 208-620-301. Your managers, including branch managers, must license
individually as mortgage loan originators if they conduct the following
activities: (1) Take residential mortgage loan applications, negotiate the
terms or conditions of residential mortgage loans, or hold themselves out as
being able to conduct these activities; (2) Supervise your loan processor or
underwriting employees; or (3) Supervise your licensed mortgage loan
originators."
As
further clarification Washington writes, "(1) Any manager or any person
who takes a residential mortgage loan application in Washington, negotiates the
terms or conditions of a residential mortgage loan on Washington property, or
holds themselves out as being able to conduct those activities, must have a
Washington MLO license. Washington licensed MLOs must work from a licensed
location. (2) Any manager who directly supervises loan processor or
underwriting employees must hold an MLO license. The MLO license can be from
any state. Washington licensed MLOs must work from a licensed location. (3) Any
manager who directly supervises Washington licensed MLOs must themselves hold a
Washington MLO license.”
Interest
rate markets started early this morning with a little more selling after
yesterday’s Yellen testimony that affirmed the Fed is still on track to
continue its tapering at the March 18th and 19th FOMC meeting. Prior to her testimony to the House Financial Services
Committee yesterday there was some concern among analysts she would come out
with a different agenda than Bernanke; we are puzzled that there would be any
concern since she was a direct influence and in complete agreement with
Bernanke’s policy of accommodation and the current tapering. Goes to show that
even the obvious can be cloudy. Yellen was widely known as a dove on
accommodation, why would anyone think otherwise?
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