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Qualified Mortgage (QM) Changes in January 2014 (Benchmark Mortgage)


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QM is a set of changes coming from CFPB to the mortgage industry in January 2014. Benchmark Mortgage (Ark-La-Tex Financial Services, LLC) is prepared for these government changes.

We want you to ensurer your lending partner is ready and that your buyers will have no issues closing after these changes go into effect.

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Qualified Mortgage (QM) Changes in January 2014 (Benchmark Mortgage)

  1. 1. Big Changes are coming! [QM] ...or are they?
  2. 2. You’ve probably heard all the buzz about the “CFPB” making lots of changes in 2014. …
  3. 3. If you are like most people, you heard the word CHANGE and decided that it was probably not a good thing...
  4. 4. But before we get into what's to come in 2014, lets take a step back...
  5. 5. Leading up to the mortgage crisis, mortgages were extremely easy to obtain.
  6. 6. 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.
  7. 7. In 2010, congress adopted a similar (but NOT identical) requirement for virtually all closed-end residential mortgage loans.
  8. 8. 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)
  9. 9. 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.
  10. 10. The ruling might cost you your next closing, but we doubt it, because you work with Benchmark
  11. 11. Lets discuss what this really means for all of us in 2014
  12. 12. 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
  13. 13. Does this Sound familiar?
  14. 14. It should if you have been working with Benchmark!
  15. 15. 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.
  16. 16. Debt-to-Income Ratio 43% with ability to go higher on FHA, VA, USDA and DU approval (45%)
  17. 17. Interest Only
  18. 18. Interest Only
  19. 19. Balloon Payments
  20. 20. Balloon Payments
  21. 21. Negative Amortization
  22. 22. Negative Amortization
  23. 23. Along with “Ability to Repay”, a [QM] loan must also not exceed 3% of the total loan amount in points and fees.
  24. 24. While these changes may be new for the industry in 2014, it won’t be for Benchmark!
  25. 25. Our team of experts will continue to set the industry standard, and guide you along the way!
  26. 26. Thank you so much For trusting your clients With a benchmark mortgage professional
  27. 27. Presented by: