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BankersOnline.com Forums Dodd-Frank Final Rules Discussions Ability to Repay/Qualified Mortgage Rule Qualifed Mortgage and Balloons > 5 Years
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#1888690 - 01/21/14 07:05 PM Qualifed Mortgage and Balloons > 5 Years
trinna Offline
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trinna
Joined: Oct 2003
Posts: 288
Midwest
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
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Joined: Feb 2008
Posts: 263
AL
Nope.

1026.43(e)(2)(i)(c)

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
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Joined: May 2005
Posts: 660
FL
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.
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#1889387 - 01/23/14 02:58 PM Re: Qualifed Mortgage and Balloons > 5 Years trinna
John Burnett Offline
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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.
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