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Calculating Ability-to-Repay

Recorded on November 20, 2013

make a Qualified Mortgage is up to you. But if you're making a covered transaction you have no choice about whether you consider the 8 factors and comply with the basic tenets of the ATR rules. If you make a QM, you're deemed to have complied with the Ability-to-Repay rules, but not all loans can be QMs. There's no reason to give up the loans that are not if you understand how to utilize the 8 factors of the Ability-to-Repay rules. (Plus, if you screw up on achieving QM status on a particular loan, you're fine, so long as you did what you needed to know under the basic ATR rules.) We'll emphasize the practical aspects of complying with the Ability-to-Repay rules by not only telling you what the regulation says, but how you actually do what you need to do.

We'll discuss the fine points of each of the 8 factors and give you suggestions for how to document your consideration of each factor. We'll discuss which elements are required to be verified and how you verify those elements. You'll learn what is acceptable to use for verification and what is not. We'll discuss how to calculate current or reasonably expected income and assets. You'll learn how to determine the monthly payment on simultaneous loans and you will understand what to count within the calculation of total monthly debt obligations and mortgage-related obligations. We'll discuss how to calculate and use the debt-to-income ratio and when to look at residual income.

This webinar will give you the insight you've been looking for to confidently tackle the Ability-to-Repay considerations and make the necessary calculations on any covered transaction. We'll discuss:

  • How to calculate reasonably expected income and assets
  • How to determine the monthly payment on simultaneous loans
  • What is included in total monthly debt obligations
  • What is including in total monthly income
  • How you calculate the debt-to-income ratio
  • What's included in residual income, and when you should you rely on it
  • Which elements are required to be verified
  • What do you need to do to verify the elements
  • What is acceptable for verification and what isn't
  • And so much more

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