Big Changes are coming!

[QM]

...or are they?

You’ve probably heard

all the buzz about

the “CFPB” making lots

of changes in 2014.

…

If you are like most people,

you heard the word CHANGE

and decided that it was

probably not a good thing...

But before we get into

what's to come in 2014,

lets take a step back...

Leading up to

the mortgage crisis,

mortgages were

extremely easy to obtain.

Since 2009, creditors were

required to follow rules

that prohibited making higher

priced mortgage loans

without assessing

the consumer’s ability to

repay the loans.

In 2010, congress adopted

a similar (but NOT identical)

requirement for virtually

all closed-end residential

mortgage loans.

While all of this was going

on, Congress also established

a presumption of compliance

with the ability to repay

requirements for a certain

category of mortgages,

called “qualified mortgages”

(QM)

You may remember the final

ability-to-repay and qualified

mortgage rule being issued in

January of 2013.

But, this rule was amended

in May and July and

will go into effect

in January of 2014.

The ruling might cost you

your next closing,

but we doubt it,

because you work

with Benchmark

Lets discuss what

this really means

for all of us in 2014

The final rule contains 8 very

important underwriting elements to

confirm a borrowers ability to repay

1. Current or reasonable expected income and assets

2. Current employment status

3. Taking into account monthly payment on said debt

4. Take into account revolving debt

5. Take into account mortgage related obligations

6. Take into account child support and alimony

7. Take into account residual income

8. Credit history

Does this

Sound familiar?

It should if you have been

working with Benchmark!

From debt-to-income

calculations and

verifications of employment,

these 8 items have already

been a part of our

processes and procedures

and help us uphold

our core values.

Debt-to-Income Ratio

43% with ability to go higher

on FHA, VA, USDA

and DU approval (45%)

Interest Only

Interest Only

Balloon Payments

Balloon Payments

Negative

Amortization

Negative

Amortization

Along with “Ability to Repay”,

a [QM] loan must also not

exceed 3% of the total loan

amount in points and fees.

While these changes may be

new for the industry in 2014,

it won’t be for Benchmark!

Our team of experts

will continue to

set the industry standard,

and guide you

along the way!

Thank you so much

For trusting your clients

With a benchmark

mortgage professional

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