In addition to the QM rule, the Consumer Financial Protection Bureau has developed the Ability to Repay (ATR) rule that mortgage lenders are expected to follow in 2014.
The ATR/QM rule requires that you make a reasonable, good-faith determination before or. when you consummate a mortgage loan that the consumer has a reasonable ability to repay the. loan, considering such factors as the consumers income or assets and employment status (if.
Secondly, what loans are exempt from ATR rule? 12 CFR § 1026.32(b)(5). In making the number of originations determination do not count subordinate-lien mortgages and mortgages that are not subject to the ATR/QM rule, such as HELOCs, time-share plans, reverse mortgages, or temporary or bridge loans with terms of 12 months or less.
One may also ask, what is the purpose of a qualified mortgage?
A Qualified Mortgage is a category of loans that have certain, more stable features that help make it more likely that youll be able to afford your loan. A lender must make a good-faith effort to determine that you have the ability to repay your mortgage before you take it out.
What are the 8 ATR rules?
At a minimum, creditors generally must consider eight underwriting factors: (1) current or reasonably expected income or assets; (2) current employment status; (3) the monthly payment on the covered transaction; (4) the monthly payment on any simultaneous loan; (5) the monthly payment for mortgage-related obligations;
