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Wednesday, July 17, 2013

HFSC Legislation Addresses Points & Fees Issue

Last week the House Financial Services Committee (HFSC) introduced the PATH Act – the Protecting American Taxpayers and Homeowners Act, which contains the language needed to resolve the points and fees problem on affiliated insurance sales. Specifically, the language in 403 in Title IV of the PATH Act contains the legislative language of H.R.1077.

Section 403. Definition of Points and Fees:
Incorporates provisions from bipartisan legislation (H.R. 1077) to increase the number of mortgages that qualify as a “Qualified Mortgage”. Excludes from the QM cap on points and fees: (1) affiliated title charges, (2) double counting of loan officer compensation, (3) escrow charges for taxes and insurance, (4) lender-paid compensation to a correspondent bank, credit union or mortgage brokerage firm, and (5) loan-level price adjustments which is an upfront fee that the Enterprises charge to offset loan-specific risk factors such as a borrower’s credit score and the loan-to-value ratio.

The HFSC is holding a Hearing to discuss the PATH Act on Thursday, July 18 at 1:00pm ET.

Read the PATH Act Section-by-Section.

Learn more about the PATH Act from the HFSC.

See H.R. 1077.