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#1888690 - 01/21/14 07:05 PM Qualifed Mortgage and Balloons > 5 Years
trinna Offline
Gold Star
Joined: Oct 2003
Posts: 288
This might be a silly question but I have read so much material that I am REALLY starting to question my sanity. We are NOT a small creditor. Is it possible for 62 month BALLOON loan to be a qualified mortgage? (If it meets all the criteria, of course.)

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Ability to Repay/Qualified Mortgage Rule
#1888702 - 01/21/14 07:18 PM Re: Qualifed Mortgage and Balloons > 5 Years trinna
dblack Offline
Gold Star
Joined: Feb 2008
Posts: 263


The QM balloon exceptions are 1026.43(e)(6) and 1026.43(f)


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#1889280 - 01/22/14 10:08 PM Re: Qualifed Mortgage and Balloons > 5 Years trinna
OldSchoolBanker Offline
Platinum Poster
Joined: May 2005
Posts: 660
Agree with dblack. You can meet the ATR rule with a 62 month balloon but not a Qualified Mortgage. Your 62 month balloon cannot be a Higher Priced Covered Transaction.
Last edited by OldSchoolBanker; 01/22/14 10:09 PM.
Old School Banker

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#1889387 - 01/23/14 02:58 PM Re: Qualifed Mortgage and Balloons > 5 Years trinna
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,868
Cape Cod
Well, it could be an HPCT if you include the balloon payment in determining DTI and ability to repay. If it's not an HPCT, you only need to consider the payments scheduled within the first five years after the scheduled first payment date.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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