19-14: CLARIFICATION ON OUR RATE SHEETS

CBC Mortgage Agency does not charge discount points on any of our loan products. The terminology of ‘discount points’ has crept into many discussions surrounding the rates charged on our rate sheets and CBCMA wants to clarify our position on the matter.

On our rate sheets, CBCMA uses the term ‘points’ to refer to points charged for a particular FICO band. For instance, if you look at our DPA Edge product, we charge 1.000 point on any loan that has a borrower with a FICO score in the range of 620-639. In that described situation, the loan would be locked at 100.000 with a 1 point charge, though in pricing engines this often is displayed as a price of 99.00.

This distinction is important because we charge these points and fees to the lender, not the borrower. The lender may pass this charge on to the borrower, but should not do so as a Discount Point. It should be called a ‘point’.

This at times, especially on lower loan amounts, potentially cause a loan to exceed the 3% points and fees rule. For those loans with seller concessions, please keep in mind the memo provided by Buckley Sandler (at great expense to CBCMA) regarding the conversion of borrower points and fees to seller points and fees.