Option 1-D: The Small Creditor Portfolio Qualified Mortgage.Įach of the options for originating Qualified Mortgages is discussed below.Option 1-C: The Temporary Authority Qualified Mortgage or.Option 1-B: The Small Creditor Balloon Payment Qualified Mortgage.Option 1-A: The General Qualified Mortgage.
#When does mandatory compliance of the new qm rule begin series#
The bank that chooses Option 1 will then have an additional series of elections to make because there are several avenues available to originate Qualified Mortgages. Examiners will see this as a significant risk, and they will be right. Every loan must fully satisfy the ATR and there will be no presumption of compliance or Safe Harbor available. The remaining Non-Qualified Mortgages will have to fully and completely satisfy the Ability to Repay Rule, with significant liability attaching to any loan that fails to meet ATR requirements. Option 2 is somewhat riskier since only a portion of the Bank’s portfolio will be Qualified Mortgages subject to Safe Harbor or a presumption of compliance. A portfolio of nothing but Qualified Mortgages should entitle the bank to either a Safe Harbor or a presumption of compliance with the Ability To Repay Rule.
Option 3: originate all loans focused only on satisfying the Ability To Repay Rule.īy now, I am sure everyone realizes that Option 1 is the most risk-free.Option 2: originate Qualified Mortgages when possible to do so, but also originate loans that will merely satisfy the Ability To Repay Rule if the customer or the loan in question cannot be structured as a QM or.Option 1: only originate Qualified Mortgages.Please refer to earlier Newsletter Articles and materials from our previous quarterly meetings for a more detailed analysis.Īs you approach this task, you will be faced with an initial set of three options: As we think about developing an outline of a Loan Policy for the ATR and QM Rules, we will only make passing reference to many of those requirements. We have already spent a lot of time and discussion considering what is required under the Ability to Repay Rule and what it will take for a loan to be a Qualified Mortgage. Here is where we begin to put on our thinking caps.īetween now and January 10, 2014, every bank that is subject to the Ability To Repay Rule will be faced with a basic decision: whether or not to originate Qualified Mortgages. In order to facilitate that discussion and make that time as productive as possible, it seems advisable to provide a basic description of what that outline will entail. At the August Quarterly Meeting, we will present and discuss a very general outline of a Generic Loan Policy for the Ability to Repay and Qualified Mortgage Rules.
0 kommentar(er)
