QM Points and Fees

Overview

Under Section 1412 of the Dodd-Frank Act, in order for a loan to be eligible for an "Ability-to-Repay" (ATR) safe harbor and be considered a "Qualified Mortgage" (QM), the loan must follow certain criteria. One requirement is that the total points and fees payable in connection with the loan do not exceed 3% of the total loan amount, and title fees are included in this calculation if they are paid to an affiliate of the originator.

The Mortgage Choice Act amends the Ability-to-Repay/Qualified Mortgage provision (Section 1412) in the Dodd-Frank Act to exclude title and certain escrow charges if they are paid to an affiliate of the originator from the law's calculation for the three-percent cap for points and fees.

Impact to the Industry

If title and certain escrow charges are paid to an affiliate of the originator, they are included under the law's three-percent cap on points and fees. Although title fees paid to a non-affiliated title company are not included in the three-percent cap on points and fees, the Mortgage Choice Act has prompted debate about title insurance.

ALTA Policy Statement

QM Points & Fees Statement (adopted February 2015)
Since ALTA has some members that have affiliated relationships and other members who do not have affiliations, we are not advocating for or against the Mortgage Choice Act. However, it is appropriate that ALTA respond to requests from our members about how they can advocate on the legislation to ensure Congress has accurate information about title insurance.

ALTA Advocacy

March 25, 2015 Myth vs. Fact on title insurance

January 14, 2014 Statement for the Record on House Financial Services Committee Hearing entitled “How Prospective and Current Homeowners Will Be Harmed by the CFPB’s Qualified Mortgage Rule”

October 24, 2013 ALTA response to consumer organizations letter to Senators and Representatives on H.R. 3211

May 21, 2013 ALTA Statement for the Record on House Financial Services Committee Hearing entitled "Qualified Mortgages: Examining the Impact of the Ability to Repay Rule."

March 18, 2013 Joint trades letter regarding H.R 1077 
April 27, 2012 Joint Trades letter to Richard Cordray regarding Qualified Mortgages

June 21, 2011 Letter by ALTA President Anne Anastasi regarding Qualified Mortgages

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