[kowsley]

I am working through the recent release of amendments to Reg. Z and need an opinion on 1026.43(e)(3)(iii).

I understand it to mean that if you want to maintain a QM status on a loan that exceeded points and fees then you can use the requirements listed here to “cure” the excess and that policies and procedures for post-consummation review of points and fees should be maintained and followed. In the interpretations; however, it says under 3. Post-consummation policies and procedures that a creditor is not required to conduct a post-consummation review of all loans originated nor must policies and procedures require a creditor or assignee to apply 1026.43(e)(3)(iii) and (iv) for all loans for which the total points and fees are found to exceed the limit.

So, in other words, we can utilize this to retrieve the QM status if we have exceeded points and fees thresholds but these actions are not required? Just want to make sure I am interpreting this correctly. Thanks!

[rcooper]

I agree with your interpretation. This is from the final rule:

“The Bureau did not intend the post-consummation review requirement, as proposed, to
require review of all loans, and the Bureau is making these clarifying changes to address concerns raised by commenters. As noted by industry commenters, a rule that requires review of all loans within a short time after consummation could be impracticable. Similarly, the Bureau did not intend proposed § 1026.43(e)(3)(iii)(C) to require the creditor or assignee to make cure payments for all loans that are found to exceed the applicable points and fees limit.”

[jholzknecht]

I also agree with the interpretation.You have both done a thorough analysis of the issue.

[Author]

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