Guide to the Ability-to-Repay Rule and Qualified Mortgages PDF Format
Understand the ability-to-repay rule, qualified mortgages, and how to successfully conduct your business inside their frameworks
The ability-to-repay rule and its qualified mortgage standard, which became effective in January 2014, affect nearly every player in the residential finance industry. Servicers must now evaluate their pricing and profitability models to determine if they need to lower some prices to stay competitive on QM loans, or raise other prices to make a reasonable return for handling non-QM loans. The secondary market must examine the risk potential and determine what strictures to place on loans they buy. Originators bear most of the burden, though, needing to adhere to new strictly outlined underwriting standards, avoid products with forbidden features and adhere to new document-management processes that preserve and organize records, and with them legal protection.
In the Guide to the Ability-to-Repay Rule and Qualified Mortgages, updated in October 2013, you’ll find a concise examination of this complex rule, its requirements, and its impacts. Learn what it takes to stay within the ability-to-repay restrictions, what constitutes a qualified mortgage and how the repercussions are likely to affect your business.
Use this special report as your roadmap to the ATR rule and what you can do to run a successful mortgage business within the rule's confines.
Partial Table of Contents
Types of Mortgages Covered by the ATR Rule
Ways to Comply with the ATR Rule
Safe Harbor QMs
Safety of the Safe Harbor Questioned
Rebuttable Presumption QMs
Transition Guidance from the GSEs
HUD's Proposed QM Rule
Non-Government QM Originations
Guidance on QM Interest Rate Calculation
Concerns with Use of APOR
Borrowers with Non-Standard Income
Liability for Non-QMs
Refinancing Nonstandard Mortgages
Exemptions from ATR Requirements
Impact on the Secondary Market
Impact on Non-Agency Jumbo Originations
Impact on Subprime Originations
Impact on Servicing
Fair Lending Concerns
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