Q.

M (Qualified Mortgage) DODD-FRANK ACT implemented as of 1/10/2014 CFPB (Consumer Federal Protection Bureau) ATR (Ability to Repay)

Q.M (Qualified Mortgage) 1) 2) 3) 4) What date do the QM rules take place- 1/10/2014 Does that date apply to App date or closing date- App date What does ATR stand for- Ability to Repay What are the 4 major components that make a loan a QM or not? a) Points & Fees <= 3% b) No risky features- Neg Am, Deferred Principal, IO Payments, Balloons, Irregular payments) c) Max 30 year term d) Max DTI of 43%

5) What are the point and fee limits for the following loan amountsa) $100,000+- 3% b) $60,000-$100,000- $3000 c) $20,000-$60,000-5% 6) What fees are counted against the 3% fee requirement- MIP & Bona Fide 3rd Party charges, LO Comp (broker ONLY), Real Estate related fees that are not normal and customary (Realtor commissions are not included), Max Prepay penalty & Prepay penalty paid in Refi 7) What is the definition of an affiliate- Company with common ownership interest with lender 8) What is the max DTI allowed for a QM loan- 43% 9) Is there any exception to that DTI rule- yes, temporary exception granted until January 2021. With DU/DO approval, you can exceed the 43% DTI and still meet QM requirements!!!!!!!!! 10) What loan programs and types of homes do the ATR and QM requirements pertain to- ALL 11) What do I think will be the biggest impact to myself and my agents to come from these rules- Even more detailed in the preapproval process. Full income docs must be provided before issuing a preapproval. Its going to become extremely difficult to close a loan in less than 20 days with all these new requirements. HOWEVER

DODD-FRANK ACT implemented as of 1/10/2014 Its here and we are prepared!!!! We have been prepping and its business as usual!!! Home Team will continue to give faster than average service which will result in smooth closings!!! CFPB (Consumer Federal Protection Bureau) The Consumer Federal Protection Bureau is an independent federal agency that holds primary responsibility for regulating consumer protection with regard to financial products and services in the United States.

ATR (Ability to Repay) Creditor must verify Borrowers ability to repay the loan using reasonably reliable third party records to consider the following factors: Monthly payment Income assets debt obligations Employment Credit history DTI not to exceed 43% Applies to primary residence, second home and investment

What does this mean in a nut shell.. We need to continue to partner with our clients when moving through the process of loan prequalification and then into the documentation collection and then to closing. We are a team Agent Buyer Loan Officer