Cx16921 is a custom, but frequently-used, form given to comply with the “anti-steering” requirements of 12 C.F.R. § 1026.36(e)(2) & (3) (requiring a creditor to present a consumer with certain loan options; our standard form for this requirement is Cx15546).
Cx16921 contains an area which discloses the “total origination points or fees and discount points” for the subject loan. This is due to Ibid. § 1026.36(e)(3)(i)(C) which requires that the consumer be presented with loan options which include “the loan with the lowest total dollar amount of discount points, origination points or origination fees . . .”
When the current iteration of Ibid. was first proposed (see 77 FR 55272 ), the phrase “discount points and origination points or fees” was defined in proposed 12 C.F.R. § 1026.36(d)(2)(ii)(B) (see 77 FR 55354 ) to generally include most items considered to be a finance charge under 12 C.F.R. § 1026.4(a) and (b) (including closing agent charges, even if these were not considered a finance charge) which were to be payable by the consumer at or before consummation to a creditor or loan originator organization (including affiliates). Exempt from this definition were interest payments, the time-price differential, bona fide third-party charges not retained by the creditor or loan originator organization, seller points, escrow funds (if the amounts would not otherwise by considered a finance charge), and property insurance premiums.
This definition was not adopted in the final rule (see 78 FR 11374 ) and the CFPB revised the requirements in 12 C.F.R. § 1026.36(e)(3)(i)(C) “to use the phrase ‘discount points, origination points or origination fees’ to make more clear which points and fees are included for purposes of this provision.” Unfortunately, this clarity led to no official definition or guidance for the “new” phrase “discount points, origination points or origination fees”, leaving open to interpretation which specific fees should be disclosed on these “anti-steering” documents for this requirement.
Based partly on the definition given by the CFPB to consumers of what an origination fee is (see https://www.consumerfinance.gov/ask-cfpb/what-are-mortgage-origination-services-what-is-an-origination-fee-en-155/) and partly on the proposed definition, we will be using the following fields to disclose the “total origination points or fees and discount points” on Cx16921 for the subject loan:
- If the loan is subject to TRID, then the unrounded amounts disclosed for the total of Section A fees on the Loan Estimate (borrower-paid) will be disclosed (“Fee Section A Borrower (or All) Total” FI 82329).
- If the loan is not subject to TRID, then the amount which prints in Block A of the Good Faith Estimate will be disclosed (“Fee 803 Charged Amount” FI 43734).
These changes will take effect on August 15, 2020. Questions or concerns should be directed to Client Support at 1.800.497.3584.