Legal Blog

Compensation and Compliance Matters: Cures for Cap Violations

The Consumer Financial Protection Bureau has adopted a rule that allows lenders to cure violations of the 3% cap on points and fees for qualified mortgage loans. The rule would provide lenders up to 210 days after consummation of the loan to cure overages by making a payment to the borrower of the amount of the overage plus the contractual interest. The cure period is shortened/terminated if prior to the 210 days, the borrower goes 60 days past due, the consumer institutes an action concerning the loan or the consumer sends notice of the excessive fees. While there is no “good faith” requirement as originally proposed, an institution does need to have policies and procedures for post-consummation loan review to detect and cure such errors. These policies do not, however, require the review of all loans nor mandate the cure of all violations.

Click here to read the entire article on National Mortgage News.

If you have any questions please contact Ari Karen at:

Bank Manager Reimbursementsakaren@offitkurman.com  | 240.507.1740

Ari Karen is an experienced litigator and speaker who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide.

Mr. Karen’s practice is diverse, representing clients on matters concerning banking regulations, Dodd Frank financial reform laws, contractual disputes, employment and labor statutes, wage-hour class actions, employment discrimination and fair lending matters, whistleblower complaints and non-competition claims, among others.

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