Limiting Upfront Points and Fees

An Inside Mortgage Finance Webinar
Recorded June 28, 2012

Time is running out for the Consumer Financial Protection Bureau to finish its rulemaking by January 2013, part of a Dodd-Frank Act mandate. The bureau just unveiled a new rulemaking initiative that would dramatically limit the size and types of upfront points and fees mortgage originators could charge. Origination charges based on loan size would be banned and “bona fide” discount points could only be used when borrowers want to lower their interest rates. The qualifications of all loan originators would also be regulated under the new plans, whether they work for a bank, mortgage brokerage or nonprofit organization.

In this recording, get the details on the latest regulatory proposals from top legal experts and an industry exec to restrict mortgage origination compensation and find out what it may mean for you and your business. You'll also learn how these drastic changes could reshape the mortgage lending landscape and impact your bottom line.

The CFPB proposals cover not only loan originator compensation disclosures under the Truth in Lending Act but also new limits on compensation for mortgage firms overall. The bureau is requesting input from small businesses, among others, as it attempts to simplify and improve the loan origination process.

These industry experts share their insights and answer questions:

Richard J. Andreano

Mortgage Banking Group Practice Leader,

Ballard Spahr, LLP

H. Burton Embry

SVP, Enterprise Risk Management,

Primary Residential Mortgage

 Kristie D. Kully

Of Counsel,

K&L Gates LLP


 Guy D. Cecala

CEO & Publisher,

Inside Mortgage Finance




Topics covered include:

  • Requirements to comply with the SAFE Act for LOs, at depository and nondepository firms and nonprofits--a TILA issue
  • What constitutes “bona fide” discount points
  • Requirements to comply with the SAFE Act for LOs, at depository and nondepository firms
  • What are considered “steering incentives”
  • Revisiting the Federal Reserve’s loan originator compensation rule
  • How new loan origination rules might impact smaller mortgage lenders
  • CFPB’s proposal on who can pay loan originator compensation and under what conditions
  • Whether any compensation can be based on mortgage business profits
  • Exceptions for certain situations
  • Qualification standards and training for LOs
  • Pricing concessions to cover unanticipated third-party charges
  • Upfront fees and affiliated entities
  • Whether any MLOs are exempt from the SAFE Act
  • Relationship between discount points and “qualified” mortgages
  • The complicated process for using “point banks”
  • New rules on record retention requirements for LOs
  • Plans to set a percentage cap on employers paying bonuses or contributions to non-qualified plans
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After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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