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#1775332 - 01/11/13 04:37 PM
Re: Ability to Repay Rules
ahkcompliance
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Gold Star
Joined: Dec 2006
Posts: 435
TN
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I will read it electronically, hate to waste so much paper. I've only started to skim. I'm thinking the same thing. For those planning to go electronically as much as possible, I'd be interested in what resources you use - desktop at work, laptop, tablet (of whichever brand), combination????
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#1775336 - 01/11/13 04:40 PM
Re: Ability to Repay Rules
ahkcompliance
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Power Poster
Joined: Nov 2001
Posts: 7,984
FINALLY ABOVE the gnat line
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Adobe Acrobat will let you do the same thing if you have the full version. I'll be doing electronic. won't even look up the rural and underserved as I know we will NOT qualify for that.
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#1775349 - 01/11/13 04:49 PM
Re: Ability to Repay Rules
ahkcompliance
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Power Poster
Joined: Oct 2009
Posts: 9,104
OK
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Sorry to be repetitive here, (and thanks for the link), so.....if our county qualifies as one of those rural codes, can we rely on that? Or do we have to wait for the pronouncement referred to in the escrow rule (sorry, haven't gotten to the ability to repay rule yet) that something will be forthcoming in 4-6 weeks?
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#1775362 - 01/11/13 04:58 PM
Re: Ability to Repay Rules
ahkcompliance
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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if our county qualifies as one of those rural codes, can we rely on that
Yes.
(A) A county is “rural” during a calendar year if it is neither in a metropolitan statistical area nor in a micropolitan statistical area that is adjacent to a metropolitan statistical area, as those terms are defined by the U.S. Office of Management and Budget and applied under currently applicable Urban Influence Codes (UICs), established by the United States Department of Agriculture’s Economic Research Service (USDA-ERS). A creditor may rely as a safe harbor on the list of counties published by the Bureau to determine whether a county qualifies as “rural” for a particular calendar year.
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#1775390 - 01/11/13 05:25 PM
Re: Ability to Repay Rules
ahkcompliance
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Power Poster
Joined: Oct 2009
Posts: 9,104
OK
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Thank you both.
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I'm fixin' to fix that.
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#1775433 - 01/11/13 06:07 PM
Re: Ability to Repay Rules
ahkcompliance
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Power Poster
Joined: Aug 2006
Posts: 4,266
Chillin an grillin
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I don't have access to that but was wondering if I could use Adobe.
I don;t have adobe at home though, would have to do this all at work.
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#1775436 - 01/11/13 06:09 PM
Re: Ability to Repay Rules
ahkcompliance
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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You can highlight and add sticky notes through the most current version of adobe reader that is available for free download.
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#1775509 - 01/11/13 07:24 PM
Re: Ability to Repay Rules
rlcarey
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Diamond Poster
Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
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Holy Buckets! I can add sticky notes in adobe?!?!?!?!? I think this falls under the IIA's New Year's Resolution suggestion #3: Embrace technology. Now if I can figure out how to work this silly iPad in my bottom drawer I might be set.
If I come in smiling on Monday, I'll have to let you know that I mastered this.
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#1775517 - 01/11/13 07:29 PM
Re: Ability to Repay Rules
ahkcompliance
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Diamond Poster
Joined: Sep 2008
Posts: 2,474
Midwest
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Thinking iPad is going into my budget next year!
I have been going through the escrow rules...hopefully I am not missing something.
To me, the biggest difference in the escrow rules is that if you make a higher priced mortgage loan first-lien then you must escrow for 5 years. We fall under the definition of rural. Our counties UIC is 8 and so are the ones adjacent to us. So since we meet the defintion of rural, we woudl be exempt from the rules?
I don't think this will affect us much as we have only made 2 HPMLs and we have capabilitiy to escrow.
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#1775597 - 01/11/13 08:44 PM
Re: Ability to Repay Rules
ahkcompliance
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100 Club
Joined: Aug 2007
Posts: 151
Tennessee
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I am loving this Post It Note capibility in Adobe. You can teach an old dog new tricks. Wow!!!
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#1775620 - 01/11/13 09:16 PM
Re: Ability to Repay Rules
lbbanker
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Diamond Poster
Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
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Derail away, Carolina! I've been sticky-ing this afternoon and loving it. Can't wait to try the annotate. Any tips? One of our SVPs said some stuff may not save. ????
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#1775686 - 01/11/13 09:59 PM
Re: Ability to Repay Rules
ahkcompliance
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Gold Star
Joined: May 2006
Posts: 452
Between here and there
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IT just installed Nitro Pro 8 on my computer and it will do the same stuff. And it's cheaper than Adobe.
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#1775767 - 01/13/13 07:02 AM
Re: Ability to Repay Rules
Carolina Blue
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Gold Star
Joined: Sep 2001
Posts: 445
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The rules state (pages 797 and 798) that if a balloon-payment qualified mortgage is sold, assigned or otherwise transferred three years or more after consummation, the balloon-payment qualified mortgage retains its status as a qualified mortgage. It then states a balloon-payment qualified mortgage under the rules for creditors operating predominantly in rural or underserved areas may be sold, assigned, or otherwise transferred at any time to another creditor retain its status as a qualified mortgage. I don’t understand the first requirement above. Aren’t balloon-payments prohibited from being a qualified mortgage anyway and, if so, why would there be any restriction mentioned?
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#1775768 - 01/13/13 01:52 PM
Re: Ability to Repay Rules
ahkcompliance
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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It means that a balloon payment qualified mortgage (made by a bank that qualifies under the rural/underserved rule) can be sold at anytime to another financial institution that qualifies under the rural/underserved rule and retain the qualified mortgage status.
If you sell the loan to anyone else (i.e., someone that does not qualify under the rural/underserved rule ), it has to be three years or more after consummation to retain the status.
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#1776041 - 01/14/13 07:05 PM
Re: Ability to Repay Rules
ahkcompliance
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Member
Joined: Sep 2011
Posts: 74
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I am with a small bank that makes balloons and is not in a rural or undeserved area.
Has anyone made the calculation that they are going to continue making non-QM balloons?
I only partially understand the reasoning behind ceasing mortgage activity, as we have only had 2 residential foreclosures in the last 5 years.
Seems like a good argument could be made that with our underwriting and history the customer likely has the ability to repay, but that argument also seems risky and expensive.
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#1776049 - 01/14/13 07:10 PM
Re: Ability to Repay Rules
BankRegGuy
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100 Club
Joined: Nov 2006
Posts: 105
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What do you do if two of your markets are in rural areas but two others are not? Are we supposed to only offer balloon mortgages to the customers in the rural markets or do we have to discontinue these products altogether to meet the Ability to Repay guidelines?
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#1776099 - 01/14/13 08:37 PM
Re: Ability to Repay Rules
ahkcompliance
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Member
Joined: Sep 2011
Posts: 74
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I don't think that you get to break apart your markets. I believe the 50% first liens in rural or under served areas relates to your entire bank.
Your entire bank either meets the rural and under served exception or you do not.
Last edited by BankRegGuy; 01/14/13 08:38 PM.
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#1776140 - 01/14/13 09:51 PM
Re: Ability to Repay Rules
ahkcompliance
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Diamond Poster
Joined: Sep 2008
Posts: 2,474
Midwest
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I agree, it is where you make majority of your loans.
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#1776191 - 01/15/13 02:16 AM
Re: Ability to Repay Rules
BankRegGuy
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10K Club
Joined: Jul 2001
Posts: 83,363
Galveston, TX
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I am with a small bank that makes balloons and is not in a rural or undeserved area.
Has anyone made the calculation that they are going to continue making non-QM balloons?
I only partially understand the reasoning behind ceasing mortgage activity, as we have only had 2 residential foreclosures in the last 5 years.
Seems like a good argument could be made that with our underwriting and history the customer likely has the ability to repay, but that argument also seems risky and expensive. If you make a non-qualified mortgage, there is a little more to it. If it is a qualified mortgage, then the borrower can try to rebut that classification in foreclosure. However, if you make a non-qualfied mortgage: "consumers can bring an action against the lender at any point during the first three years of the loan or as an offset to foreclosure at any time. In the latter cases, the recovery of interest and finance charges is capped at the amount paid during the first three years." That means basically, they can sue you anytime in the first three years whether they go into foreclosure or not. I doubt that any bank is going to risk knowingly making a non-qualfied mortgage loan. The CFPB estimates: Based on our assumed loan size ($210,000), interest rate (7%), and origination fees ($3,150) as discussed above, on average a successful borrower will have a claim of $40,225 (including the statutory TILA damages, before legal costs).
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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