Because following all this is like steering a boat with no compass, I need some help:

1026.43: The "latest version" of the final-final rules give a reprieve to what is considered a "higher-priced covered transaction" for the purposes of small creditors being able to make QM balloons for the two year transitional period - 3.5% percent above APOR.

Does this also mean I have a QM (and a reprieve) for the purposes of 1026.35and do not have to have an appraisal for a "higher-priced mortgage loan" (such as the case may be with a no-cash out refinance) as defined in that section?

This may be addressed in that "latest version final-final rule", but I could have missed it....

My apologies if this has already been asked.

*bump*

I'm not sure I fully understand what you are asking but here goes... If you meet the definition of a small creditor allowed to make Rural Balloon QM loans and therefore make a QM under this provision and that loan happens to be a HPML you would not have to comply with the appraisal requirements in 1026.35(c) for that loan.

Thanks for your response, Jerod.

Actually we are not rural or underserved (debatable IMO) but are a small creditor. I was trying to determine if we made any of these "transitional" balloon QMs whether they would be exempt also.

Any thoughts?

A small creditor that makes a HPML Rural Balloon QM between January 2014 and January 2016 would not be subject to the appraisal requirements of 1026.35(c) for that loan.