General Mortgage Knowledge · 20% of the SAFE exammedium
Correct answer: Compensation paid by a lender to its own mortgage loan originator
Under 12 CFR § 1026.32(b)(1), points and fees for QM purposes include compensation paid by the lender to its own loan originator (i.e., LO compensation). This is a common misconception — while borrower-paid origination charges can sometimes be excluded (bona fide discount points), lender-paid LO compensation must be included. Third-party charges not retained by the lender and paid to truly unaffiliated providers are generally excluded. Required insurance paid to non-affiliates is excluded. Up to two bona fide discount points can be excluded if the undiscounted rate meets specific thresholds.
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