Call to Action

Comments due on Points and Fees Calculation

 

As you may be aware, the CFPB extended the comment period pertaining to the calculation of points and fees for mortgage loan originator compensation.

We need every loan originator to send their comments to the CFPB regarding this critical issue. To help you comment, we have listed below, where to submit your comments, along with talking points. Feel free to copy and paste this information or alter the comments to suit your position.

 

Where to submit:       http://www.regulations.gov/#!submitComment;D=CFPB-2013-0002-0001

Date Due:                    Monday, February 25, 2013

 

Talking Points:                       

 

• Only compensation received by the originating entity for activities related exclusively to the origination of a residential loan should be included in the points and fees calculation. Fees associated with creditors or wholesale lenders, such as administrative fees, loan to value (LTV) and/or credit score price adjustments, etc., should not be included in the points and fees calculation. As a reminder, the rule is titled “Loan Originator Compensation.”  Originating entities would then compensate their loan originators from these fees, in accordance with their employee agreements.

 

• Originating entities should be permitted the flexibility to charge varying percentages, provided they don’t exceed the allowable 3% cap. This practice would promote strong competition and allow for the origination of smaller loan amounts, usually requested by low to moderate income borrowers. Mortgage transactions are NOT one size fits all. Some require more effort than others. Allowing entities to determine the cost of their services for a specific transaction is in the best interest of the consumer.

 

• Originating non-bank entities, like their creditor counterparts, should be permitted to receive their compensation from the borrower, lender, or a combination of both, within the 3% cap.

 

Note:

 

NAIHP believes the CFPB is cognizant of the fact Dual Compensation is NOT Double Compensation, as they currently permit creditors to utilize this important tool used by originators to assist consumers, who might otherwise not qualify to become homeowners. Many consumers, who are denied financing, due to higher than acceptable qualifying ratios, would have a better chance of qualifying, if allowed to separate their origination costs between the rate and upfront fees. 

 

Prior objections to dual compensation centered on excessive compensation from both the borrower and lender. However, with the implementation of the 3% cap, that argument is without merit. Moreover, all non-bank entities are required to disclose their total compensation to consumers.

 

 

NAIHP's Comment Letter

 

When sending in your comments, please be sure to substitute YOUR NAME where NAIHP is shown.

 

Lastly, please don’t wait! Submit your comments today. Remember to remain respectful and professional.

 

Thanks!

 

 

Talking Points:                       

 

• Only compensation received by the originating entity for activities related exclusively to the origination of a residential loan should be included in the points and fees calculation. Fees associated with creditors or wholesale lenders, such as administrative fees, loan to value (LTV) and/or credit score price adjustments, etc., should not be included in the points and fees calculation. As a reminder, the rule is titled “Loan Originator Compensation.”  Originating entities would then compensate their loan originators from these fees, in accordance with their employee agreements.

 

• Originating entities should be permitted the flexibility to charge varying percentages, provided they don’t exceed the allowable 3% cap. This practice would promote strong competition and allow for the origination of smaller loan amounts, usually requested by low to moderate income borrowers. Mortgage transactions are NOT one size fits all. Some require more effort than others. Allowing entities to determine the cost of their services for a specific transaction is in the best interest of the consumer.

 

• Originating non-bank entities, like their creditor counterparts, should be permitted to receive their compensation from the borrower, lender, or a combination of both, within the 3% cap.

Note: NAIHP believes the CFPB is cognizant of the fact Dual Compensation is NOT Double Compensation, as they currently permit creditors to utilize this important toolused by originators to assist consumers, who might otherwise not qualify to become homeowners.Many consumers, who are denied financing, due to higher than acceptable qualifying ratios, would have a better chance of qualifying, if allowed to separate their origination costs between the rate and upfront fees. 

Prior objections to dual compensation centered on excessive compensation from both the borrower and lender. However, with the implementation of the 3% cap, that argument is without merit. Moreover, all non-bank entities are required to disclose their total compensation to consumers.

 

When sending in your comments, please be sure to substitute your NAIHP where NAIHP is shown.

 

Lastly, please don’t wait! Submit your comments today. Remember to remain respectfully and professional.

 

Thanks!