The CFPB uses the “Consumer Price Index for All Urban Consumers” as published by the U.S. Currently, a transaction is determined to be a high-cost mortgage if its points and fees exceed 5 percent of the total loan amount for a loan amount greater than or equal to $21,549 and 8 percent of the total loan amount or $1,077 (whichever is less) for a loan amount less than $21,549.īoth the ATR/QM Rule and High-Cost Mortgage Rule require that these amounts be recalculated annually for inflation, and the CFPB has released the new amounts for 2020. Under the 2013 Dodd-Frank mortgage amendments, the CFPB also issued the High-Cost Mortgage Rule which sets forth restrictions and consumer protections for high-cost mortgages. Under current limits, a covered transaction is not a qualified mortgage unless the transaction’s points and fees do not exceed 3 percent of the total loan amount for a loan amount greater than or equal to $107,747 $3,232 for a loan amount greater than or equal to $64,648 but less than $107,747 5 percent of the total loan amount for loans greater than or equal to $21,549 but less than $64,648 $1,077 for a loan amount greater than or equal to $13,468 but less than $21,549 and 8 percent of the total loan amount for loans less than $13,468. The ATR/QM Rule established the points and fees limits that a loan cannot exceed in order to satisfy the requirements for a qualified mortgage. In January 2013, the CFPB issued a final rule pursuant to the Dodd-Frank Act requiring mortgage lenders to consider a consumer’s ability to repay a home mortgage loan before making the loan. These updated amounts are effective January 1, 2020. The Consumer Financial Protection Bureau (“CFPB”) has updated the inflation-adjusted loan amounts applicable to the points and fees calculations under the CFPB’s Ability-to-Repay/Qualified Mortgage rule (“ATR/QM Rule”) and High-Cost Mortgage Rule.
#Qm points and fees limits 2020 pdf
Business Reorganization and Financial RestructuringĬlient Alerts Print PDF CFPB Updates Regulation Z Thresholds for 2020 August 2, 2019.