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#2228155 - 01/02/20 05:41 PM Small Creditor QM - DTI and RI
Likes to Comply Offline
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In the mountains
We have a policy DTI of 50% but will approve loans with a DTI greater than 50% (as allowed by policy) when the borrower has the ability to repay and has sufficient residual income. We document the file and track it as a policy exception.

So when we make a policy exception in this instance and have considered the customers ability to repay the debt, will it still qualify as a Small Creditor QM (assuming all other requirements are met also) even if the DTI is higher than the amount that is indicated in policy?
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Ability to Repay/Qualified Mortgage Rule
#2228263 - 01/04/20 12:28 PM Re: Small Creditor QM - DTI and RI Likes to Comply
rlcarey Online
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rlcarey
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Galveston, TX
If you "approve loans with a DTI greater than 50% (as allowed by policy) when the borrower has the ability to repay and has sufficient residual income", why is it a policy exception?
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#2228271 - 01/06/20 01:48 PM Re: Small Creditor QM - DTI and RI Likes to Comply
RR Joker Offline
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The Swamp
We have a stated policy DTI limit as well, but if it exceeds that by some small amount and they have good residuals and other credit factors are acceptable, we will take it to loan committee to request approval over limits.

It's not a habit, so ours would still be an exception to the norm, and I would still consider these QMs.
Last edited by RR Joker; 01/06/20 01:49 PM.
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#2228273 - 01/06/20 02:00 PM Re: Small Creditor QM - DTI and RI Likes to Comply
rlcarey Online
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rlcarey
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Galveston, TX
Just make sure that everyone goes through the exact same process. And if they all go through the exact same process, is that not a policy?
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#2228510 - 01/08/20 04:19 PM Re: Small Creditor QM - DTI and RI Likes to Comply
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In the mountains
We consider it a policy exception mainly so that it is tracked on a log and documented properly on the credit write up in the loan file. It is more of a CYA purpose than anything else.

Thanks for the help!!!
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