See 12 CFR Part 1026, Supplement I, Comment 1026.43(c)(3) and Ability-to-Repay and Qualified Mortgage Rule Small Entity Compliance Guide, sec. The Equal Credit Opportunity Act and Regulation B prohibit creditors from discriminating on the basis of race, color, religion, national origin, sex, marital status, or age (provided that the applicant has the capacity to contract), or because all or part of an applicant’s income derives from public assistance, or because the applicant has in good faith exercised rights under consumer credit protection laws, including TILA.ġ4 The rule provides for a wide variety of sources to help you verify the information you rely on to determine ATR. 17, 2013).ġ1 Ability-to-Repay and Qualified Mortgage Rule Small Entity Compliance Guide, sec. 17, 2013).ġ0 12 CFR Part 1026, Supplement I, Comment 1026.43(c) (Official Interpretations) Ability-to-Repay and Qualified Mortgage Rule Small Entity Compliance Guide, sec. The rules for determining whether a loan workout is a modification or refinance are found in Regulation Z at 12 CFR § 1026.20(a).Ĩ Ability-to-Repay and Qualified Mortgage Rule Small Entity Compliance Guide, sec. Therefore, if a loan modification is not subject to TILA, it is not subject to the ATR/QM rule. TILA applies to a loan modification only if it is considered a refinancing under Regulation Z. 23Ģ Federal credit unions are prohibited from charging prepayment penalties on any loan. Determine the member’s total monthly debt-to-income ratio (DTI) is no more than 43 percent.Consider and verify the member’s income or assets, current debt obligations, alimony, and child-support obligations and.
Underwrite based on a fully amortizing schedule using the maximum rate permitted during the first five years after the date of the first periodic payment.Also, in order for the loan to be a General QM, you must: 22 In addition to the requirements that apply to all four types of QMs – no negative amortization, no interest-only payments, no loan terms in excess of 30 years, and limitations on points and fees – General QMs may not have balloon payment features. If your credit union does not qualify as a small creditor, you and/or your affiliates can originate the first two types of QMs:ġ) General QM: The first type of QM is a broad category intended for all creditors. If your credit union meets the two criteria to qualify as a small creditor, you and/or your affiliate(s) can originate all four of the following types of QMs.
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