Mortgage fees’ loophole

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Consumer Financial Protection Bureau’s (CFPB) new mortgage lending rules are intended to reduce the number of risky mortgages by implementing rules that, among other things, require potential lenders to evaluate whether you can afford the payments on a new mortgage. However, because it still is unclear how the new regulations will count mortgage brokers’ compensation, the fees that you pay for a qualified mortgage could exceed the 3 percent limit that goes into effect January 2014, says Center for Responsible Lending President Mike Calhoun. The peril is those fees might result in a loan for which you aren’t qualified.

A loan still could count as “qualified” if you pay your broker 3 percentage points upfront and agree to an increased interest rate that pays for another 3-percentage-point bonus from the lender to your broker, for example.

CFPB should have a final decision about what kind of broker fees count toward the limit in 2013, but it hadn’t decided as of press time.