Which of the following fees would NOT be included in the points and fees calculation under the ATR/QM rule?
Correct Answer
C) Title insurance premiums
Under the ATR/QM rule's points and fees test, title insurance premiums are excluded from the calculation as they are considered bona fide third-party charges. However, origination fees, discount points, and broker compensation are included in determining whether the loan meets the QM points and fees threshold.
Why This Is the Correct Answer
Under the ATR/QM rule's points and fees test, title insurance premiums are excluded from the calculation as they are considered bona fide third-party charges. However, origination fees, discount points, and broker compensation are included in determining whether the loan meets the QM points and fees threshold.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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An MLO receives a loan application where the borrower lists their income as 'self-employed - varies monthly.' No specific dollar amount is provided. The borrower states they will provide tax returns later. What is the status of this application under TRID?