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Updated Qualified Mortgage - A Quick Look at the "New Normal" for Mortgage Lending

Ever since the Dodd Frank Act mandated the creation of a new special category of mortgage loans called “qualified mortgages” (AKA “QM”) the industry has eagerly anticipated the coming of a clear and usable definition of that important new term. Loans that meet that definition will receive everything from more favorable treatment in capital adequacy calculations, to a free pass when being bundled for sale into the secondary market, to some form of legal shelter as having been properly underwritten according to government sanctioned standards. So the implementing regulations defining this important new loan term have been eagerly awaited by everyone with an interest in mortgage lending from lenders, to consumer advocates, to realtors and builders who are afraid that a tough new standard for QM may put the skids on real estate sales and new home construction. So in this first of a series of webinars dealing with mortgage loan-related issues, we will take a close look at the QM rules themselves, and at what these rules will probably mean for mortgage lending in the future.

What You Will Learn:

  • The specific definition of “Qualified Mortgage” (“QM”)
  • What product design, underwriting, and documentation standards have to be met for a loan to qualify
  • What types of loans never can qualify as QMs
  • What types of loans may qualify in a conditional basis
  • The eight separate underwriting standards that have to be met and which of them allow for some temporary “wiggle room” if they can’t be met
  • The documentation standards that will probably be expected
  • The impact of “Teaser Rates” on Qualified Mortgages
  • The standing of loans with Balloon Payment features and the limited exception that allows “small lenders” in “rural or underserved areas” to continue to offer those products while preserving their QM status
  • What you need to do to obtain a Safe Harbor standing
    • And what rights consumers might still have to challenge that standing
  • Which types of loans that can’t qualify as full-fledged QMs with a Safe Harbor, may still qualify as QMs with a “Rebuttable Presumption” of adequate underwriting and what that status may mean for the prospects of future litigation over adequate underwriting

Target Audience:

Senior Lending Management, Lenders at all levels involved in mortgage lending, Mortgage Loan Originators, Loan Processors, Compliance and Audit Personnel

Level: Intermediate

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