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PPDocs System Training CFPB changes effective January 2014.

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Presentation on theme: "PPDocs System Training CFPB changes effective January 2014."— Presentation transcript:

1 PPDocs System Training CFPB changes effective January 2014

2 Please direct all questions to: By Ambra Costner

3 What you should be doing today: By Ambra Costner  What type of QM are you going to be doing? *Are you going to be doing Higher Priced QM  Identify your affiliates

4 Affiliate: Any company that controls, is controlled by, or is under common control with another company. “Control” means a minimum of 25% interest By Ambra Costner

5 What you should be doing today:  What type of QM are you going to be doing? *Are you going to be doing Higher Priced QM  Identify your affiliates  Run test loans in the PPDocs system  Determine if you qualify for a small creditor QM By Ambra Costner

6 Small Creditors: Lenders, including their affiliates, having no more that $2 billion in assets and originating no more than 500 first lien mortgages a year.

7 By Ambra Costner Section 32 Changes Now includes any closed-end consumer credit transaction secured by a principal dwelling. – Purchase Money Transactions – HELOC – Bridge Loans to obtain principal dwelling – Home Improvement (Interest or P&I) – Temporary – Closed-end Home Equity Loans – Refinancing of closed-end Purchase Money or home equity loan HOEPA definitions do not include: – Initial Construction Loans – Reverse Mortgages – Originated or directly financed by Housing Financing Agency (HFA) – Originated or directly financed USDA Rural Development Section 502 Direct Loan Program – Non-owner occupied refinances and second home mortgages

8 By Ambra Costner There are no substitutions for the Rules themselves! This webinar is meant to highlight the changes to our website and order forms for the upcoming changes.

9 Qualified Mortgages are broken down into 4 main classifications: By Ambra Costner General QM: Has no toxic loan features Must pass points and fees test Maximum debt to income ratio of less than or equal to 43%

10 Qualified Mortgages are broken down into 4 main classifications: By Ambra Costner Temporary QM (GSE Eligible): Subject to the same rule as General QM Also subject to the individual GSE’s underwriting requirements

11 Qualified Mortgages are broken down into 4 main classifications: By Ambra Costner Balloon QM: Subject to the same rules as General QM For creditors who pass the rural and underserved test Balloon loans under this classification are restricted by o Calculating payments based on a maximum of 30 year amortization o Interest rate cannot increase over the term (fixed rate) o Minimum loan term of 5 years.

12 Qualified Mortgages are broken down into 4 main classifications: By Ambra Costner Small Creditor QM: Temporary classification to allow smaller credit unions and community banks a 2 year transition period for loans held in portfolio Increases HPML threshold to allow these loans to maintain safe harbor.

13 By Ambra Costner FNMA defines bona fide discount points as: Points paid that result in a bona fide reduction of the note rate, provided the interest rate reduction is reasonably consistent with established industry norms and practices. A point will be presumed to be bona fide if it reduces the note rate by a minimum of 25 basis points, assuming all other loan terms remain the same.

14 By Ambra Costner What to do going forward: Modify your templates Register for webinars Test loans

15 By Ambra Costner Thank you for your business!


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