The following thresholds relating to Qualified Mortgage status will take effect January 1, 2015:
- The Points & Fees thresholds will increase and cannot exceed the following:
|Loan Amount:||Points & Fees Cap:|
|$101,953 & Up||3% (of the Total Loan Amount)|
|$61,172 – $101,952.99||$3,059|
|$20,391 – $61,171.99||5% (of the Total Loan Amount)|
|$12,744 – $20,390.99||$1,020|
|Under $12,744||8% (of the Total Loan Amount)|
**The above thresholds apply to most types of QMs. However, if your institution originates “Special QMs” under any government programs (HUD, VA, etc.), you should check those specific program requirements.
- The threshold used to determine small creditor status under Regulation Z will be $2.060 billion. This is up from $2.028 billion in 2014. This threshold comes into play for HPML escrow accounts under §1026.35(b)(2)(iii)(C), and the Ability to Repay/Qualified Mortgage rules under §1026.43.
To be exempt from the HPML escrow requirements as of January 1st, an institution must meet ALL of the following:
1. Have an asset size of less than $2.060 billion as of December 31, 2014;
2. In the prior calendar year, the creditor and any affiliates together originated no more than 500 first-lien dwelling secured loans; and,
3. In any of the 3 preceding calendar years, more than 50% of the creditor’s consumer purpose first-lien dwelling-secured loans were secured by properties located in counties deemed to be rural or underserved; and,
4. Neither the creditor or its affiliates maintain escrow accounts, except for those required to be established due to HPML status or escrow accounts established after closing to assist a borrower in avoiding default or foreclosure. See §1026.35(b)(2)(iii)(D) for details.
Additionally, institutions looking to originate Small Creditor Portfolio Qualified Mortgages or Balloon Payment Qualified Mortgages must meet the loan volume restrictions (#2 above) AND have assets of less than $2.060 billion as of December 31, 2014.
Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!