Coast 2 Coast Funding Group High Cost Loan Policy
We believe the American dream of homeownership is best served by offering a wide array of loan programs and allowing our originating network flexibility in pricing their services. Coast 2 Coast Funding Group offers many different programs that are priced according to the various loan features and lending risks, however we are merely responsible for providing a conditional commitment to fund a loan. It is the responsibility of the originating partner to discern the appropriateness of the program chosen with regard to the individual borrower's needs and circumstances.
We allow our originating partners the flexibility to determine the rates and fees charged to a consumer based on the level of services required by a borrower's individual situation. Coast 2 Coast Funding Group expects its originating partners to exercise fair and ethical judgment in determining the loan product and price appropriate for a particular borrower. Furthermore, we expect each of our originating partners to have a policy and/or position on high cost loans to justify the rate and fees charged to a borrower. To assist our customers with this responsibility, we have established the following policies:
4.00% Maximum Allowable Points and Fees - Coast 2 Coast Funding Group will not lend on any mortgage loan (conforming or non-conforming) if the total points and fees charged are greater than 4.00% of the mortgage loan amount (regardless of the party paying the fee including but not limited to borrower, seller, lender, etc.). Special Note: For loans with single financed mortgage insurance, the 4.00% calculation will be based on the Gross Loan Amount (including the MI premium).
The following points and fees are included in the 4.00% calculation, whether they are paid to originator, lender or third party:
- Origination Fees
- Points (non bona-fide, i.e.do not directly buy down a borrower's interest rate)
- Application Fees
- Administrative Fees
- Underwriting Fees
- Commitment Fees
- Processing Fees
- Escrow Waiver Fees
- Broker Fees
- Other Miscellaneous Fees that in total exceed 0.25% of the loan amount
*Only Lender paid compensation disclosed on the HUD-1 and paid at time of disbursement will be included in the High Cost calculation.
Although this list above does not represent the complete list of ALL fees that can be included , the following points and fees will be excluded from the 4.00% calculation:
- Discount Points (must be bona-fide, which reduces the rate by at least 25 basis points for each discount point)
- Attorney Fees
- Notary Fees
- Appraisal Fees
- Credit Report Fees
- Survey Fees
- Title Examination and Abstract
- Tax Certification
- Home Inspection Fees
- Mortgage Insurance
- Cost of Title, Hazard or Flood Policies
- State or Local Taxes or Flood Policies
- Escrow Deposits
High Cost or Predatory Loans - Coast 2 Coast Funding Group will not fund any mortgage loan defined as "high cost" or "predatory" under any federal, state, local or municipal ordinance. This includes all loans covered under the Home Ownership and Equity Protection Act of 1944 (Section 32). Although Coast 2 Coast Funding Group may perform pre-funding and/or post closing calculations to ensure compliance with all high cost tests, it is ultimately the originating partner's responsibility under Coast 2 Coast Funding Group's Agreement to comply with all applicable laws.
In some instances, Coast 2 Coast Funding Group may provide monetary restitution to borrower(s) to remedy any loan found post-closing where points and fees charged exceed 4.00% revenue limitation or any high cost policy. The amount of the restitution will subsequently be invoiced to the originating partner, which payment will be expected within 30 days of invoice. Please note, originating partner's are responsible to reimburse restitution even where the loan may have passed Coast 2 Coast Funding Group's pre-funding authorization and is later found to require restitution.
Net Tangible Benefit Disclosure - Coast 2 Coast Funding Group will not fund any mortgage loan that has an existing home loan which was consummated within the prior five years, when the new loan does not provide reasonable, tangible net benefit to the borrower. Coast 2 Coast Funding Group provides a worksheet that can be used in determining the borrower's tangible net benefit(s) as the benefit relates directly to the new loan extended. Please be aware that many states require a Net Tangible Benefit Disclosure and may or may not have their own specific worksheet. Below is a list of all states that require a Net Tangible Benefit Disclosure.
- Nevada (disclosure is named Commercially Reasonable Means Worksheet)
- New Mexico
- North Carolina
- South Carolina
A mortgage prepayment penalty must provide some benefit to the borrower, such as rate or fee reduction. The borrower should be offered the choice of another mortgage program that does not require a prepayment penalty. The terms of any prepayment penalty should be adequately disclosed to the borrower.
Loan programs must be provided to consumers in a non-discriminatory manner. Loan pricing must not be based on a borrower's race, color, gender, marital status, familial status, immigration status, sexual orientation, religion, disability, or national origin.
Borrowers must be offered loan options commensurate with their qualifications, and such options and their costs must be clearly explained. Borrowers must not be steered to higher-cost products if they can qualify for a lower-cost standard mortgage product.
No evidence of disparate impact exists, where an otherwise neutral policy or practice applied to all credit applicants has disparate impact by disproportionately excluding or burdening person of a certain race, color, age, etc. on a prohibited basis.
The total compensation paid to an originating partner, either directly by the borrower or Coast 2 Coast Funding Group, must be reasonably related to the value of the good and facilities that were actually furnished and the services that were actually performed.
Coast 2 Coast Funding Group will not fund any mortgage where the borrower obtained a prepaid single-premium credit life insurance policy with the mortgage, regardless of whether the premium is financed in the loan amount or paid directly from the borrower's funds.
We realize that placing limits on our originating partner's compensation in an effort to address the inappropriate practices of a very few lenders may restrict some legitimate lending options. However, we support the mortgage industry movement to combat lending abuses and believe it is important to establish policies that will help avoid indefensible lending practices.