Bulletin 14-24 originally issued May 2, 2014 is being revised. Refer to the yellow highlight below.
HomeBridge is pleased to announce enhancements and clarifications to our position on third party processing fees and the eligibility of these fees based on whether the broker compensation is lender paid or borrower paid. HomeBridge is also announcing a new Affiliated Service Provider Fee Certification which will be required when affiliated service providers are utilized on a transaction.
Third Party Processing Company NMLS ID
When a third party processing company is used, an invoice that includes the processing company NMLS ID, is required.
Third party processing fees are allowed as detailed below.
Conventional Transactions
• Lender paid compensation: Allowed (current policy)
• Borrower paid compensation: Allowed (current policy)
FHA Transactions
- Lender paid compensation: Allowed (enhancement)
- Borrower paid compensation: Allowed (enhancement)
VA Transactions
• Lender paid compensation: Allowed (current policy)
• Borrower paid compensation: Allowed (current policy)
Reminder: The third party processing fee must be included in the 1% origination fee
USDA Transactions
• Lender paid compensation: Allowed (current policy)
• Borrower paid compensation: Allowed (current policy)
Jumbo Transactions
• Lender paid compensation: Not allowed (current policy)
• Borrower paid compensation: Not allowed (current policy)
The chart below summarizes the information provided above.
GFE
Third party processing fees are included on the GFE as detailed under the QM 3% Points and Fees Test topic below.
QM 3% Points and Fees Test
- If the third party processing fee is from a company affiliated with the broker, the fees are included in the QM 3% Points and Fees test and are included in Box 1 of the GFE.
- If the third party processing fee is not from a company affiliated with the broker, the fees are not included in the QM 3% Points and Fees test, however they must be included in Box 3 of the GFE.
Affiliated Service Provider Fee Certification
HomeBridge will require a completed and signed Affiliated Service Provider Fee Certification for loans submitted on or after October 20, 2014 and there is an affiliated service provider (e.g. broker owned escrow, 3rd party processor, etc.).
NOTE: The Certification is not required if there are no affiliated service providers on the transaction.
The broker will be required to identify the name of the service provider, the fee charged for each individual affiliated service provider and the total amount charged by all affiliated providers.
The Affiliated Service Provider Fee Certification is posted on the HomeBridge website under the Forms section and is also attached for reference.
The Submission forms will also be updated to include the Affiliated Service Provider Fee Certification and will be posted on the website at www.homebridgewholesale.com
This new guidance applies to loans submitted on or after October 20, 2014
If you have any questions, please contact your Account Executive.
