Well, today is the day we’ve all been anxious about for the past year; the CFPB’s new Ability-to-Repay and Qualified Mortgage rules have gone into effect. Mortgage brokers – do you know how your funding lenders are going to handle non-QM loans, if at all? Are you prepared to review points-and-fees upfront to avoid the need for last minute changes or – worse – fatal compliance issues within the rubrics of your funding lenders? Mortgage bankers, do you have a plan to handle loans that “fall out” of QM because of issues with points-and-fees calculations or investor interpretations? Tammy Butler over at Optimal Blue has some excellent advice on having a “Plan B” for the mortgage bankers and depositories out there. You can check out her latest blog here.
For those of you doing VA loans, the VA issued a circular yesterday indicating that all TILA requirements regarding ATR/QM will apply to VA loans until the VA has issued its own ATR/QM regulations, which it anticipates doing “in the near future.” Note that any loan that is NOT a QM but meets VA eligibility requirements will still be guaranteed by the VA.
Remember that HUD’s FHA QM definition – implementing rebuttable presumption and safe-harbor thresholds for FHA loans – also goes into effect today. HUD released a summary of that rule back on December 11 and you can find the actual text of the rule in the Federal Register.
Finally, I’m interested in hearing about your experiences with ATR/QM as we venture into this brave new world together! If you have any difficulties – or good experiences – that you’d like to share as these new applications make their way to the closing table, feel free to leave a comment below. (Just keep it clean!) or send me an email.