A new study prepared by a mortgage compliance service provider found that a good share of current originations don’t meet the qualified mortgage safe harbor requirements.
More than one-in-five home loans originated today would not qualify for the Consumer Financial Protection Bureau’s QM safe harbor.
More than half of the non-qualifying loans have fees that exceed the new 3 percent threshold for points and fees.
Those findings were based on a study conducted by ComplianceEase. The Burlingame, Calif.-based firm said it analyzed the effects that the QM rules will have on current loans audited by its automated compliance solution.
Among the loans with fees that exceed the 3 percent threshold, the typical amount of excess was nearly $1,500.
The remaining loans had annual percentage rates that were too high to meet safe harbor requirements.
In addition to not qualifying for the safe harbor, ComplianceEase noted that the loans wouldn’t be qualify as agency eligible based on current guidelines.
“Moreover, due to lack of marketability, lenders generally try to avoid originating loans known as ‘high-cost’ loans, which are subject to restrictions in the Home Ownership and Equity Protection Act,” the statement said. “With new, stricter points and fees thresholds in the amended HOEPA, close to 3 percent of loans in the study that previously weren’t HOEPA loans would move into the federal ‘high-cost’ category. On average, those loans would exceed the new HOEPA points and fees threshold by more than $1,000.”
