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#1803385 - 04/10/13 06:59 PM ATR and QM Compliance Guide - Small Entity
RR Sarah Offline
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The first compliance guide has been published by the CFPB.

http://files.consumerfinance.gov/f/201304_cfpb_compliance-guide_atr-qm-rule.pdf
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#1803392 - 04/10/13 07:10 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
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I'm glancing at the comparison chart, general ATR vs. QM, and the points and fees table is misleading to me. "3%" is shown as the points and fees limit on all 3 classes of QMs, despite the fact that it varies based on loan amount. Loans of less than $12,500 for example can have points and fees up to 8% (unless i'm missing something).
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#1803408 - 04/10/13 07:27 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
rlcarey Online
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As with all "guidance" document, I'm sure it will create as many questions as there are answers provided.
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#1803411 - 04/10/13 07:30 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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Randy....the more i look at it, the more questions i'm having: "employment status", "simultaneous loans", and "credit history" all have "no specific requirement" for balloon QMs. I'm struggling to find where in section (f) these requirements are waived for balloon QMs.
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#1803424 - 04/10/13 07:45 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
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I think it simply means you could accept several means to veryify all of the above.

I also think this guide is not specific to small as in "rural"...it's just a guide for smaller entity's with limited resources.

Too bad they couldn't break it down specifically...but that would be asking too much, I'm sure. :-/
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#1803433 - 04/10/13 08:01 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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But it says "balloon payment QMs" ...what kind of balloon payment QMs are there except ones for rural/underserved banks?
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#1803441 - 04/10/13 08:20 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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Perhaps we're talking apples/oranges....here's the document i'm referring to:

Comparison Chart
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#1803518 - 04/10/13 10:25 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
Norman Paperman Offline
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Well, I just read the guide and I will give them a little bit of credit. I think it did a good job of dumbing it down while still addressing the caveats of the guide.

Answered some questions that I had spinning in my head.

Have a good night BOL!
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#1803563 - 04/11/13 01:05 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
zitch70 Offline
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If you are a small servicer bank in a non-rural area, I have developed a chart that summarizes the applicablity of each of the laws for management. I have also cross referenced each item to the page in the Triage materials. I am willing to share this chart. I would like to put this chart on banker tools after review by the 'gurus', but need to know who to send it to.

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#1803576 - 04/11/13 01:17 PM Re: ATR and QM Compliance Guide - Small Entity zitch70
Dani York, CRCM Offline
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Originally Posted By: zitch70
If you are a small servicer bank in a non-rural area, I have developed a chart that summarizes the applicablity of each of the laws for management. I have also cross referenced each item to the page in the Triage materials. I am willing to share this chart. I would like to put this chart on banker tools after review by the 'gurus', but need to know who to send it to.


Send it to Andy Z to be added to Bankers Tools.
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#1803605 - 04/11/13 01:49 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
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raitch, to (I think) answer your question about Balloon QM's. Only R/U banks can make them [under QM rules]. R/U banks are exempt from the specific requirements of Appdx Q, so they are not as strict on how you verify these items and because R/U are not held to a specific DTI ratio, they don't use that terminology "included in underwriting DTI.
Last edited by RR Joker; 04/11/13 01:50 PM. Reason: clarification
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#1803608 - 04/11/13 01:52 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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But where are employment status, credit history, and simultaneous loans exempted for R/U banks? I understand the DTI part.....no rigid 43%. My take on this has always been that even originating QM balloons as a R/U bank, we still would have to verify employment, take into account credit history, and consider any simultaneous loans and i don't see a problem in doing so. I'm just wondering why the CFPB in this chart seems to be saying i don't have to.
Last edited by raitchjay; 04/11/13 01:53 PM.
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#1803609 - 04/11/13 01:55 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
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They aren't exempted. There is just no specific documentation, per se. For instance, you could verify it orally and document the convo. Under Appdx Q, you have very specific requirements.
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#1803611 - 04/11/13 01:58 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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Ok. Seems to me it would say "consider and verify" then, like it does for say "mortgage-related obligations".
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#1803612 - 04/11/13 01:59 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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"No specific requirement" to me means "do whatever you want, or don't want, with this one".
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#1803615 - 04/11/13 02:03 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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One more thing (sorry), but how many ways are there to pull a credit report? Even under the general ATR rules, it has "consider and verify", yet under balloon QMs it says "no specific requirement"...why the difference? Same with simultaneous loans and employment status......why the difference?
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#1803622 - 04/11/13 02:08 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
John Burnett Offline
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"No specific requirement" may simply mean that there's nothing different about the requirements for this column as compared with the ATR column. Perhaps better words could have been used, but let's not make more of the chart or even the Guidance than we should.
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#1803623 - 04/11/13 02:11 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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John....i'm perfectly willing to disregard the document; i just want to make sure i'm not missing something. If "no specific requirement" means "refer to the general ATR rules", i think the choice of words will cause a lot of confusion. Obviously, this is just my opinion.
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#1803631 - 04/11/13 02:16 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
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I think that is actually an error. They likely meant to put "consider and verify" in those spots, to be quite honest with you.

It looks (to me) like they got befuddled on their main objective. When they say "no specific" everywhere but the first time, they were honing in on the fact 'there is no specific DTI' to consider...I just about guarantee ya.
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#1803633 - 04/11/13 02:20 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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I think a lot of people who were waiting around for the Cliff's notes version of ATR will be led astray by this document.
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#1803635 - 04/11/13 02:20 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
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Also, read your footnotes...I think that will explain alot. wink

Think of it this way...(and I've changed my chart). Rural Balloons fall under general ATR Standards...may have been simpler for them just to have footnoted Rural Balloon QM's under the ATR Standard heading. smirk
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#1803637 - 04/11/13 02:21 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
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Any compliance officer worth their salt...will have read the full version...surely tell me it's so. eek shocked
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#1803644 - 04/11/13 02:24 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
raitchjay Offline
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A small footnote at the end of a document that says "other rules may apply" doesn't cut it to me when what you have in the document itself is misleading. I've read the full version, as you know. wink
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#1803653 - 04/11/13 02:29 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
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Yeah, I know...and I think we've got it nailed for the most part...so just correct the chart, if you want to use it in any way...personally, I think (for us) it's a waste of space. We really don't care what the General or Temporary requirements are.
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#1803742 - 04/11/13 03:56 PM Re: ATR and QM Compliance Guide - Small Entity RR Sarah
ahkcompliance Offline
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I don't care for the chart but like the summary. I think it is kind of helpful but you still need to know the actual rule.

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