Homebridge is revising the way the 3% points and fees and state/federal high-cost tests are run on Qualified Mortgage (QM) transactions using Lender Paid Compensation (LPC) based on investor clarifications.
Effective March 9, 2020 and later the points and fees and high-cost tests on QM transactions will be run using:
- Actual LPC figures, and
- Actual origination points/actual discount points
Tests will no longer be run reducing the LPC by the amount of the origination points when the discount points are a result of the LPC.
Examples
- Current Test
- 5% origination points
- 2% LPC
- Test run using 1.5% origination points and .5% LPC (2% LPC minus 1.5% discount; LPC reduced by the amount of the origination points)
- New Test – Effective 3/9/2020 and later
- 5% origination points
- 2% LPC
- Test will be run using 1.5% origination points and 2% LPC
As a reminder, Non-QM transactions are not impacted.
If you have any questions, please contact your Account Executive
