For the past four years has been a challenge in the home mortgage industry. Delinquencies and foreclosures has been at record numbers are at levels we having seen since the great depression; which has had a major impact on our overall economy. In addition, the unemployment rate, higher energy cost, along with the high inventory of homes, and home sites for sale throughout the country has also greatly impacted the housing market. Because of how these variables impacted the economy, the government decided it was a good idea to add or amend mortgage regulations. Some of those the new and/or amended regulations include Ability to Repay/Qualified Mortgage, 2013 HOEPA Rule, Loan Originator Rule, ECOA Valuations, TILA HPML Appraisals, Escrows, and TILA and RESPA Servicing.
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 consumer’s income or assets and employment status (if relied on) against:
The mortgage loan payment
Ongoing expenses related to the mortgage loan or the property that secures it, such as property taxes and insurance you require the consumer to buy
Payments on simultaneous loans that are secured by the same property
Other debt obligations, alimony, and child-support payments
The 2013 HOEPA Rule enacted by the Obama Administration is related to homeownership counseling:
Creditors must provide a list of homeownership counseling organizations to most mortgage loan applicants within three days of application. This requirement applies to most types of closed-end and open-end credit transactions, including high-cost mortgages
Prior to making a loan that permits negative amortization to a first-time borrower, a creditor must confirm that the consumer received homeownership counseling. This requirement applies to most types of closed-end loans secured by a dwelling, but will not apply to high-cost mortgages (which cannot have negative