CFPB Proposes 3% Cure
On Wednesday, April 30, 2014, The Consumer Financial Protection Bureau (CFPB) proposed to institute a "cure" mechanism for cases in which a lender inadvertently exceeds the 3% threshold on fees and points. NAR data has shown that lenders have been implementing cushions to ensure that loans do not exceed the 3% cap on fees and points and thus would not qualify as Qualified Mortgages (QM). Under the proposal, lenders could refund any excesses within 120 days in order to cure exceeding the 3% cap allowing for lending right up to the threshold. CFPB is also requesting comments on whether it should institute a similar policy for exceeding the 43% Debt to Income (DTI) cap. NAR supports giving greater compliance flexibility to lenders as well as leveling the playing field for lenders in calculating the 3% cap. Comments are due 30 days from publication in the Federal Register.