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Wednesday, February 12, 2014

Definition of "Affiliate" for Purpose of Points and Fees in QM Rule

By: ABIA Outside Counsel Katie Wechsler, Barnett Sivon & Natter, PC

On the February 7th ABIA Government Relations Working Group call, an ABIA member asked what the definition of affiliate is for purposes of the points and fees calculation for Qualified Mortgages (QM).  This led to further discussions, and we prepared a short memo on this point to clarify the issue and clear up any confusion.

The specific question at hand is whether an insurance division of a lender would be deemed an affiliate for purposes of the Ability to Repay/Qualified Mortgage rule (ATR/QM rule).  This memo concludes that an insurance division is not an affiliate for these purposes, however fees charged by a division in connection with a mortgage loan would be included in points and fees.

Download the ABIA-members only memo to learn more.

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