Ability To Repay (ATR)

[Pages:17]

 Ability To Repay (ATR)

? Creditors must determine that borrowers have a reasonable ability to repay a loan based on consideration and verification of factors indicative of a consumer's credit capacity, including: income/assets, employment status, monthly housing payment (PITI, HOA's and any subordinate financing), other debt obligations, DTI and credit history.

Qualified Mortgage

? Loan must meet standards set forth by the Consumer Financial Protection Bureau (CFPB) ? Depending on the APR, and whether it passes the HPML test, QM can be classified as Safe

Harbor QM or Rebuttable Presumption QM

Temporary QM & HUD QM

? Temporary QM & HUD QM loans are loans tha t are originated and closed in compliance with Agency Guidelines (i.e. Fannie Mae, FHA, USDA, VA)

HPML

? A higher priced mortgage loan (HPML) is defined as a loan that exceeds the average prime offer rate (APOR) for a comparable transaction as of the date the interest rate is set by 1.5% or more for loans secured by a first lien. Under Temporary QM HPML rules apply to owner-occupied and second home transactions.

? HUD QM defines a higher priced mortgage loan as a loan where the APR exceeds the APOR by 1.15% plus the applicable annual MIP rate.

Q: Effective January 10, 2014, will Planet Home Lending purchase both QM and Non-QM loans?

A: Planet Home Lending will purchase loans that meet Temporary QM and HUD QM requirements. Planet Home Lending will not purchase non-QM or General QM loans.

Q: Will Planet Home Lending purchase Temporary/HUD QM loans

that fall into Rebuttable Presumption?

A: Yes.

Q: Will Planet Home Lending purchase QM loans that meet the balloon or small creditor guidelines?

A: No.

Q: Will Planet Home Lending purchase non-QM loans? A: Non-QM loans will not be purchased. Q: Will Planet Home Lending purchase a loan if it falls within the definition

of HPML? A: Yes, Planet Home Lending will purchase conventional, FHA and VA, fixed

rate, non-streamline programs that fall within the definition of HPML. Q: Will the Planet Home Lending Seller Guide be updated to define

standards for the DTI computation? A: Temporary QM/HUD QM loans must meet Agency guidelines (Fannie

Mae, FHA, VA, and USDA). As is our current policy, conventional and government loans with an "Approve/Eligible" or "Accept" AUS Finding, DTI is subject to AUS Findings. Manually underwritten government loans, the maximum DTI is subject to Agency and Planet Home Lending guidelines.

Q: Will Planet Home Lending require specific disclosures?

A: No, we will not mandate specific disclosure forms. However, Sellers are responsible to ensure all applicable disclosures required under the ATR and QM provisions of the Dodd-Frank Act are provided.

Q: What third party vendor does Planet Home Lending utilize for compliance?

A: ComplianceEase.

Q: Will Planet Home Lending test for Higher Priced Mortgage loans (Section 35)?

A: Yes, we will test for HPML through Compliance Ease.

Q: Will Planet Home Lending purchase High Cost/High Fee Loans (Section 32) that have an "Approve/Eligible" Finding?

A: No, we will not purchase High Cost loans.

Q: Will the ATR/QM provisions require changes to the MLPA? A: No change to the MLPA is required. All updates will be referenced

in the Seller Guide and Announcements. Q: Will Planet Home Lending purchase Rebuttable Presumption QM

loans and will there be a price adjustment? A: Planet Home Lending will purchase Temporary/HUD QM loans

that fall under Rebuttable Presumption. There is no price

adjustment. Q: Is Planet Home Lending buying QM loans that do not fall into the

Safe Harbor category? A: Planet Home Lending will purchase Temporary/HUD QM loans

that fall under both Safe Harbor and Rebuttable Presumption.

Q: What items are required to be submitted with a closed loan? A: Planet Home Lending requires the following:

? Lender Fee Worksheet ? QM and HOEPA Loan Detail Worksheet ? Affiliate Disclosure Worksheet, if applicable ? Lender QM/HOEPA Points & Fees Test Results ? Copy of Undiscounted Lender Rate Sheet, if applicable ? Bona Fide Discount Point Worksheet, if applicable ? Lender Rate Lock Confirmation with Borrower ? Appraisal Acknowledgment Form

? Right to Receive a Copy of Appraisal(s)/Valuation(s) ? Appraisal Waiver, if applicable ? Appraisal(s)/Valuation(s) Delivery to Borrower Documentation ? Homeowner Counseling Disclosure ? NMLS ID is provided for both the loan originator and loan originator's company on the

loan application, Note and Security Instrument

Planet Home Lending does not mandate the use of specific forms; Sellers may utilize their own forms

Q: Will Planet Home Lending require a specific income and debt worksheet with explanations to document the DTI analysis or may the Seller use their own when submitting files for purchase?

A: Planet Home Lending will not mandate the use of a specific income and debt worksheet.

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download