Discounting Discount Points
It wasn’t hard for us to forecast that, after NEC Director Brainard endorsed CFPB Director Chopra’s jihad against mortgage “junk fees,” that the discount points that received particular opprobrium would be moved up the priority ladder for federal restriction. A Friday CFPB report makes clear that this is indeed very much in the works. We expect new standards to mandate additional protections for borrowers through more complex disclosures, sharp restrictions on comparison-shopping and lead-generation sites, and maybe even a UDAAP edict requiring that discount points be in a borrower’s best interest based on the likely break-even point.