QM Checklist: Prepare for Ability-to-Repay/Qualified Mortgage Implementation

Qualifed Mortgage Checklist - Prepare for Ability to Repay & QM implementation


An Inside Mortgage Finance Webinar

Recorded May 9, 2013


The ability-to-repay rule finalized by the Consumer Financial Protection Bureau in January affects nearly every facet of originations as well as many parts of servicing and secondary marketing. The implementation deadline is short—just nine months left. The CFPB is still working on figuring out the final parameters of the rule, which will overlap with some other major new rules, such as loan originator compensation. And the risks of not complying with the ATR/QM rule are potentially enormous, with borrowers able to fend off foreclosure and recoup as much as three years of finance charges and fees if they make the case that their lender didn’t comply with the rule’s requirements.

You need a well-considered plan of attack to be sure you’re ready on all fronts by Jan. 10, 2014, when the ATR/QM rule takes effect. Listen to “QM Checklist: Prepare for Ability-to-Repay/Qualified Mortgage Implementation” for a practical discussion of how and what you need to evaluate now—training, paperwork, practices, and procedures—in order to be in compliance with the ability-to-repay rule and meet new qualified mortgage standards.

These legal experts tell you what you need to focus on:

Jonathan Jaffe, Partner, K&L Gates

Donald Lampe, Dykema

Jeffrey Naimon, Partner, BuckleySandler

 Jonathan Jaffe
K&L Gates
 Donald Lampe
Leader, Financial Services Regulatory & Compliance Practice
Jeffrey Naimon

Here’s some of what they discussed:

  • What changes you should be making to paperwork and record retention,
  • What to consider as you weigh your product offerings,
  • What to expect from investors, including Fannie Mae and Freddie Mac,
  • How to identify “toxic features” and what to include in points-and-fees calculations,
  • Which rates, payments and balances should be used in underwriting,
  • When—and from what sources—to seek independent verification,
  • Which debts and obligations to examine,
  • What is an “eligible” loan and how will “eligibility” be determined,
  • What new steps you need to add to your originations process,
  • What to consider in deciding whether to continue affiliate relationships,
  • Whether you still want to be in the mortgage business.
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After the November elections, how long will it take for a new Congress and White House to pass GSE reform legislation?

I’m confident a bill will be passed the first year.


2 to 3 years. GSE reform is complicated.


Sadly it won’t happen in a Clinton or Trump first term.


Not in my lifetime.


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