The CPFB recently issued another update to the Small Entity Compliance Guide for the Ability-to-Repay and Qualified Mortgage Rule, to reflect changes from the October 2013 Final Rule. The updated guide clarifies several aspects of the QM points and fees calculation, per the October 2013 Final Rule. A new provision is included, which emphasizes that while a charge paid by a third party, and not by the consumer, might not be included in the finance charge element of points and fees (i.e., § 1026.32(b)(1)(i)), the charge may still be included in the other points and fees elements (i.e., § 1026.32(b)(1)(ii)-(vi)). Two provisions are also included that clarify the treatment of compensation paid to or by a manufactured home retailer for the purpose of what must be counted as loan originator compensation that is included in the points and fees calculation.
While not altered by the October 2013 Final Rule, the updated guide clarifies, with respect to Balloon-Payment QMs made by small creditors under § 1026.43(e)(6) and (f), that when making the determination of a consumer’s ability to make scheduled payments, unlike the calculation of balloon loan monthly payments for determining ATR, the Balloon-Payment QM calculation excludes the balloon payment even if the loan is a higher-priced loan.