PPDocs System Training CFPB changes effective January 2014

Transcription

1 PPDocs System Training CFPB changes effective January 2014

2 Please direct all questions to:

3 What you should be doing today: What type of QM are you going to be doing? *Are you going to be doing Higher Priced QM Identify your affiliates

4 Affiliate: Any company that controls, is controlled by, or is under common control with another company. Control means a minimum of 25% interest

5 What you should be doing today: What type of QM are you going to be doing? *Are you going to be doing Higher Priced QM Identify your affiliates Run test loans in the PPDocs system Determine if you qualify for a small creditor QM

6 Small Creditors: Lenders, including their affiliates, having no more that $2 billion in assets and originating no more than 500 first lien mortgages a year.

7 What you should be doing today: What type of QM are you going to be doing? *Are you going to be doing Higher Priced QM Identify your affiliates Run test loans in the PPDocs system Determine if you qualify for a small creditor QM Determine if you qualify as a lender serving rural and underserved areas

8 Rural Creditors: Creditor must extend over 50% of its loans in predominantly rural or underserved areas.

9 Section 32 Changes Now includes any closed-end consumer credit transaction secured by a principal dwelling. Purchase Money Transactions HELOC Bridge Loans to obtain principal dwelling Home Improvement (Interest or P&I) Temporary Closed-end Home Equity Loans Refinancing of closed-end Purchase Money or home equity loan HOEPA definitions do not include: Initial Construction Loans Reverse Mortgages Originated or directly financed by Housing Financing Agency (HFA) Originated or directly financed USDA Rural Development Section 502 Direct Loan Program Non-owner occupied refinances and second home mortgages

10 There are no substitutions for the Rules themselves! This webinar is meant to highlight the changes to our website and order forms for the upcoming changes.

11 Qualified Mortgages are broken down into 5 main classifications: General QM: Has no toxic loan features Must pass points and fees test Maximum debt to income ratio of less than or equal to 43%

12 Qualified Mortgages are broken down into 5 main classifications: Temporary QM (GSE Eligible): Subject to the same rule as General QM Also subject to the individual GSE s underwriting requirements

13 Qualified Mortgages are broken down into 5 main classifications: Balloon QM: Subject to the same rules as General QM For creditors who pass the rural and underserved test Balloon loans under this classification are restricted by o Calculating payments based on a maximum of 30 year amortization o Interest rate cannot increase over the term (fixed rate) o Minimum loan term of 5 years.

14 Qualified Mortgages are broken down into 5 main classifications: Small Creditor QM: Temporary classification to allow smaller credit unions and community banks a 2 year transition period for loans held in portfolio Increases HPML threshold to allow these loans to maintain safe harbor.

15 Qualified Mortgages are broken down into 5 main classifications: Small Creditor Balloon Payment QM: Must be held in portfolio 2 year transition period The loan must have a fixed interest rate and periodic payments (other than the balloon payment) that would fully amortize the loan over 30 years or less. The loan must have a term of five years or longer. Must consider consumer s debt-to-income ratio or residual income Sunsets January 10, 2016

16 FNMA defines bona fide discount points as: Points paid that result in a bona fide reduction of the note rate, provided the interest rate reduction is reasonably consistent with established industry norms and practices. A point will be presumed to be bona fide if it reduces the note rate by a minimum of 25 basis points, assuming all other loan terms remain the same.

17 What to do going forward: Modify your templates Register for webinars Test loans

18 Thank you for your business!