The Dodd-Frank ACT lowered Points and Fees Thresholds for Section 32 and Qualified Mortgages.

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1 Whlesale Brker Acknwledgment & Electin Frm Pints and Fees fr Sectin 32 and QM and Lan Originatr Cmpensatin Sectin 32 s new expanded scpe f lans: The CFPB s 2013 HOEPA Rule expands the types f residential mrtgage lans that are made subject t HOEPA Sectin 32 cverage t include: Purchase mney lans (any lien psitin); Refinance mrtgage lans (any lien psitin); Open-end credit plans (ie: HELOCs); Clsed-end equity lans. The cllateral must be the cnsumer s principal dwelling, including manufactured hmes and ther types f persnal prperty Exclusins frm the Sectin 32 cverage are: Reverse mrtgages; Cnstructin lans (initial, nt hme imprvement) USDA Rural Develpment Sectin 502 Direct Lan Prgram lans directly financed by USDA (nt the nes insured r guaranteed by USDA); Lans directly riginated and financed by a husing agency. The Ddd-Frank ACT lwered Pints and Fees Threshlds fr Sectin 32 and Qualified Mrtgages. Sectin 32, Pints and Fees Threshld: The Sectin 32, Pints and Fees Threshld has been lwered t 5% f Lan Amunt (Principal dwelling nly) Sectin 32, APR Threshlds: The APR Threshlds have been lwered t: Greater than 6.5 percent abve APOR fr cmparable transactins fr the first lien lans; Greater than 8.5 percent if dwelling is persnal prperty and the lan amunt is less than $50,000 Greater than 8.5 percent abve APOR fr cmparable transactins fr subrdinate lien lans NOTE: CMG Financial des nt purchase lans that exceed Sectin 32, APR Threshlds Qualified Mrtgage (QM), Pints and Fees Threshlds: Effective January 10, 2014, CFPB s Ability T Repay/Qualified Mrtgage Rule fund in Regulatin Z, impses a Pints and Fees cap n Qualified Mrtgage Transactins as utlined in the fllwing table: Nte Amunt Pint and Fee Threshld > $100,000 3% f Ttal Lan Amunt $60,000 - $99,999 $3,000 * $20,000 - $59,999 * 5% f Ttal Lan Amunt Nte: CMG Financial's minimum lan amunt is $60,000 CMG- Pints & Fees fr Sectin 32 & QM Plicy and Lan Originatin Cmpensatin Page 1 f 5

2 Whlesale Brker Acknwledgment & Electin Frm Pints and Fees fr Sectin 32 and QM and Lan Originatr Cmpensatin Included in the Pints and Fees Calculatin fr bth Sectin 32 and QM: Cmpensatin paid t a mrtgage brkerage (but nt their lan agents) by a brrwer r lender Any riginatin charges paid by a brrwer t a lender LLPA s that are nt included in the interest rate f the lan Discunt pints that d nt lwer the interest rate cmmensurate with industry standards Nn-refundable PMI abve FHA MIP level in a cmparable transactin Finance charges ther than interest paid t the lender, the brker, r their affiliate such as a service prvider fr credit reprts, appraisals, fld certs, hazard insurance, title agency, and escrw/clsing services. NOTE: CMG Financial will nt accept a transactin, int its Whlesale Channel, that includes an affiliate fee. All prepayment penalties paid t the lender (i.e refinance f a lan with prepayment penalties) Credit life r similar insurance payable at r befre clsing if the lender is the beneficiary. Special Rule fr HELOC s: T calculate pints and fees fr HELOCS under Regulatin Z, participatin fees payable at r befre accunt pening, if any and fees charged t cnsumers t draw n their credit line at least nce, must be included. Excluded in the Threshld Calculatin: Interest r the time-price differential. NOTE: this wuld include back-end lender and brker cmpensatin that is added nt the rate sheet fr that specific cnsumer/lan transactin (ie, YSP, lender credit) Gvernment Mrtgage insurance premiums (MIPs) including: Federal r state gvernment-spnsred MIPs such as up-frnt and annual FHA premiums, VA funding fees, and USDA guarantee fees. Certain private mrtgage insurance (PMI) premiums. Exclude mnthly r annual premiums. Als exclude up-frnt PMI premiums if the premium is less than r equal t the FHA UFMIP amunt AND brrwer receives a refund (pr-rata) upn early payff. Bna fide 3 rd party charges, prvided n prtin is retained by the lender, brker r an affiliate. NOTE: CMG Financial will nt accept a transactin, int its Whlesale Channel, that includes an affiliate fee. Bna fide discunt pints: Up t 2 discunt pints If the interest rate, withut the discunt (the base rate), des nt exceed the APOR by mre than 1% Up t 1 discunt pint if the interest rate, withut the discunt (the base rate), des nt exceed APOR by mre than 1% but less than 2%. NOTE: Bna fide discunts exceeding 1%, when the base rate des nt exceed APOR by mre than 1% but less than 2%, must be cunted twards the pints and fees. NOTE: CMG Financial des nt riginate r purchase lans that d nt meet the Sectin 32 and Qualified Mrtgage, Pints and Fees Threshlds. CMG- Pints & Fees fr Sectin 32 & QM Plicy and Lan Originatin Cmpensatin Page 2 f 5

3 Whlesale Brker Acknwledgment & Electin Frm Pints and Fees fr Sectin 32 and QM and Lan Originatr Cmpensatin Lan Originatr Cmpensatin: These plicies pertain t all clsed end lan transactins that are cvered under the CFPB s Lan Originatr Cmpensatin Rule fund in Regulatin Z and taking effect January 1, 2014 (the LO Cmp Rule ). These plicies DO NOT pertain t the All In One lan. There are three main prhibitins in the LO Cmp Rule: Lan riginatrs cannt receive cmpensatin that is based n the terms r cnditins f the lan, ther than lan amunt. Lan riginatrs cannt receive cmpensatin frm bth a cnsumer and any ther surce, which includes the lender. Lan riginatrs may nt direct (r steer ) a cnsumer t accept a lan that is nt in the cnsumer s interest in rder t increase the lan riginatr s cmpensatin. Lan Originatr cmpensatin can be received frm the lender (CMG Financial) OR the cnsumer, nt bth. A Brker must maintain written cmpensatin plans fr its lan riginatr emplyees in cmpliance with applicable laws and regulatins, including but nt limited t the new LO Cmp Rule, and must certify t CMG Financial its cmpliance with such requirements. We recmmend yu cnsult with legal cunsel fr cmpliance advice. In rder t cmply with the LO Cmp Rule, CMG Financial requires that yu select a cmpensatin level n behalf f yur cmpany that will be applied t all lans submitted t CMG Financial using the Lender Paid Cmpensatin ptin fr the upcming calendar quarter. Lender Paid cmpensatin may nt be reduced fr any reasn and yu may nt credit any f yur cmpensatin t the brrwers clsing csts. If yu chse t change yur cmpensatin at a future time, but nt mre ften than quarterly, yu must ntify CMG Financial in writing prir t the first day f the upcming quarter. Changes will nly be made n the 1st day f the quarter (1st f January, April, July & Octber) regardless f lan submissin dates r dates f previus changes t yur cmpensatin plan. January 10, 2014 cnsideratins as it relates t Sectin 32 s Pints and Fees rule: Regardless f the cmpensatin terms elected fr Lender Paid Transactins, CMG Financial will nt clse r fund a lan transactin that des nt meet Sectin 32 s Pint and Fees Threshld. CMG- Pints & Fees fr Sectin 32 & QM Plicy and Lan Originatin Cmpensatin Page 3 f 5

4 Whlesale Brker Acknwledgment & Electin Frm Pints and Fees fr Sectin 32 and QM and Lan Originatr Cmpensatin LENDER PAID COMPENSATION: Electin Optins, Effective January 1, 2014 CMG Financial ffers the fllwing electin ptins fr Lender Paid transactins. If yu chse t change yur cmpensatin plan at a future time, but nt mre than quarterly, yu must ntify CMG Financial in writing prir t the first day f the upcming quarter. Changes will nly be made n the 1 st day f the quarter (1 st f January, April, July & Octber) regardless f lan submissin dates r dates f previus changes t yur cmpensatin plan. All cmpensatin levels are subject t state and federal high cst limitatins as well as Sectin 32 s Pints and Fees threshlds. Electin Optins Definitins and Limitatins Lender-Paid Percentage: Amunt (%) in the range f 1.0% t 2.75% in 0.125% increments Flat Fee: Yu may include a Flat Fee in additin t yur percentage, nt t exceed the defined maximum per the fllwing table: If % Electin = Max Flat Fee Allw ed < 1.750% $ 1, % $ % $ % $ % $ % $ % $ % $ % Nt Available Flr and Ceiling Optins: Yu als have the ptin t set a flr and/r a celling t cap the minimum and/r maximum dllar amunt earned per transactin. By entering a flr, this will be the minimum cmpensatin paid per lan transactin, regardless f yur Flat Fee and Percentage electins. CMG Financial ffers a flr frm $0 t maximum $2750. By entering a ceiling, this will be the maximum cmpensatin paid per lan transactin, regardless f yur Flat Fee and Percentage electins. CMG Financial des nt define a maximum ceiling, but is subject t Sectin 32 and state high cst prhibited threshlds, and QM pints and fees 3% cap. CMG- Pints & Fees fr Sectin 32 & QM Plicy and Lan Originatin Cmpensatin Page 4 f 5

5 Whlesale Brker Acknwledgment & Electin Frm Pints and Fees fr Sectin 32 and QM and Lan Originatr Cmpensatin BROKER ELECTION AND ACKNOWLEDGEMENT Cmpany NMLS # CMG Brker ID # The fllwing amunts have been selected fr the upcming calendar quarter: $ + % Flat Fee Percentage *Optinal (See Flat Fee Grid) (1.0% t 2.75%) Flr Dllar Amunt $ *Optinal (Between $0 and $2750) Ceiling Dllar Amunt $ *Optinal (See Definitins and Limitatins) I understand that payment f this cmpensatin must be prperly disclsed per all Legal and Regulatry Requirements. I certify that ur Cmpany has established Lan Officer Cmpensatin agreements with each f ur lan fficers in accrdance with all applicable rules and regulatins. I understand that this selectin impacts all lans lcked r submitted, whichever cmes first, using Lender Paid Brker Cmpensatin n and after the first day f the calendar quarter fllwing this agreement and will remain in effect until a new quarterly plan is submitted. I understand that nce this electin is made, it will remain fr all future transactins unless I ntify CMG Financial f electin changes, allwed n a quarterly basis as defined in CMG Financial s Lender Cmpensatin Plicy. I understand that CMG Financial will nt riginate r purchase lans that d nt meet Sectin 32 APR r Sectin 32 and QM Pints and Fees threshlds. I understand that as a part f CMG Financial s plicy regarding the Sectin 32 Pints and Fees Threshld, CMG Financial will nt accept a transactin, int its Whlesale Channel, that includes an affiliate fee. I understand that regardless f the electins chsen, all lan transactins are subject t state and federal high cst limitatins as well as QM Pints and Fees cap and will nt be accepted if state limitatins r QM s pints and fees cap is exceeded. I represent and warrant that I have the authrity t sign this dcument as the Brker f Recrd r a Principal/Owner/Officer f the Brker Cmpany listed belw. Agreed and Accepted Date Signature Printed Name Title Cmpany CMG- Pints & Fees fr Sectin 32 & QM Plicy and Lan Originatin Cmpensatin Page 5 f 5