Changes to Broker Compensation/Commitment Fee Buyout

In response to upcoming CFPB regulatory changes, HomeBridge is announcing new requirements for Broker Compensation Elections and a commitment fee buyout option which take effect January 2014.

Broker Compensation Elections for Lender Paid Transactions

Effective January 2014, Broker Compensation election buckets for Lender Paid Transactions will now range from .50% – 2.75% of the loan amount (currently capped at 3.5%).

• For Brokers currently at 2.75% or below who do not wish to change their monthly election, no action is required.

• For Brokers currently over 2.75% election, a re-selection is required by December 31st, 2013. If no reselection occurs, the election will automatically be changed to 2.75% for the month of January. The compensation election will remain at 2.75% until that time the election is changed.

As a reminder, compensation election changes are required to be completed by January 25th, 2014 for February changes. HomeBridge will continue to allow Brokers to change compensation elections on a monthly basis.

Additionally, HomeBridge will enhance its compensation election bucket options to permit increments of .125 (currently only allowed in .25 increments).

Commitment Fee Buyout Option

HomeBridge will offer a new commitment fee buyout option for a pricing adjustment. This option will be available on rate sheets effective January 10, 2014. The commitment fee buyout will offer an option to include the commitment fee or buy it out which will provide more flexibility to facilitate your client’s needs.

HomeBridge will provide further information regarding points and fees test requirements, ability to repay, ECOA Valuations Rule, TILA Appraisal Rule and disclosure changes as they pertain to QM in the near future.

If you have any questions, please contact your Account Executive.