Seven months after the implementation of its ability-to-repay and qualified mortgage (QM) rules, the Consumer Financial Protection Bureau (CFPB) announced it is increasing the loan thresholds used to determine the maximum points and fees for QM loans effective January 1, 2015.
The new rule, published in the Federal Register on Friday, updates the limits on points and fees that loans must meet in order to fit the QM definition and be considered a "safe" loan. The bureau is required under the Truth in Lending Act (TILA) to recalculate loan limits on an annual basis to adjust for inflation.
Based on the latest calculations, CFPB's amended rule now states that points and fees cannot exceed:
- 3 percent of the total loan amount for any loan greater or equal to $101,953;
- $3,059 for loans equal or greater to $61,172 but less than $101,953;
- 5 percent of the total loan amount for mortgages greater than or equal to $20,391 but less than $61,172;
- $1,020 for loans greater than or equal to $12,744 but less than $20,391; or
- 8 percent for loan amounts less than $12,744.