Legal Blog

Compensation and Compliance Matters – October 25, 2013

Understanding Affiliate Compensation What many have overlooked in evaluating the impact of affiliate compensation on the qualified mortgage rule points and fees calculation is that the definition of an affiliate is slightly different for QM laws than is used in determining the need for an affiliated business disclosure. An affiliate under the QM law relies upon the definition of “control” contained in Bank Holding Company Act of 1956. That definition considers an entity as an affiliate if the creditor (1) directly or indirectly controls 25% of the stock; (2) in any manner controls the election of a majority of the directors or trustees; or (3) it is determined that lender directly or indirectly exercises a controlling influence over the management or policies of the bank or company. Read more on National Mortgage News.