I have put together checklists now for each of the changes with which we will be dealing. It has come to my attention in this process that there are different ways that borrowers have to be qualified under diferent parts. What number are we actually supposed to use?
HPML requires looking at the highest payment in the first 7 years
Ability to Repay has varying rules depending on what compliance method is chosen
Should the ability to repay ratio be our determining factor as far as policy exception reporting, etc?
Will we need to be able to prove that we’ve done both ATR ratio testing and HPML ratio testing?
The HPML repayment ability requirements are set to expire at 11:59pm on January 9, 2014 which means they won’t conflict with the ATR requirements when they become effective on January 10, 2014. Your bank can decide what DTI ratio they want to use. If you are making a general QM then the DTI must not exceed 43% – if you exceed that you will not have a QM under the general QM rule, even if you make an exception to your policy.