In a communication obtained exclusively by MPA, it has been revealed that the CFPB will not budge on QM
or the 3% rule, and anticipates broker backlash.
The rule is final, and no further notice or comment periods are planned, according to an email obtained exclusively by MPA that a high ranking industry organization official, recently sent to another industry professional.
Not only that, but the CFPB “recognizes the broker disparity” and will still move forward as planned.
“I met with Pete Carroll two nights ago and he stated unequivocally that they are "done" with QM
,” the official wrote in the email. “He recognized the broker disparity and lamented that the consumer advocates would roast them if they give in on this one. When the rule was rolled out this week Richard Cordray called me and told me he expected to get a backlash from the brokers. They have stated that they believe for many brokers, they will be able to stay inside the 3% if they don't use affiliates for title (1pt to origination and 2pt to the house).”
Marc Savitt, president of NAIHP, points out that the CFPB “believes” brokers will be able to stay within 3%, but asks where the evidence is.
“Did he do any testing to support his belief? Is he going to release it?” he asks.
In the email, the official goes on to say that “the rule is final - there is no further notice and comment planned.”
“I will tell you that the anti-broker sentiment in the Fed (with Paul Mondor) has now gone to CFPB. I have been told that they believe that congressional intent was to address the brokers,” the official wrote.
He stated that the only action the CFPB will take is potentially on affiliated title services, but this will only happen should HR1077 gain traction.
“It is a difficult issue and clearly disparages a business model explicitly with no clear reason as to why,” the official wrote.
The CFPB is most likely willing to give up on the issue of affiliate fees for a reason, Savitt said.
“If they cave in and don’t include them in points and fees, I assume they’re doing this because hopefully it will cause 1077 to be abandoned, which would ensure that brokers paid compensation remained in the points and fees,” he said.
But Savitt applauds the organization official for his honesty to speak out against broker disparity.
“It’s tremendous because he doesn’t represent the mortgage brokers,” Savitt said.