FAQs On ATR & QM For Small Entities – Part Two

iStock_000010654155SmallIntroduction. This is  Part Two of ATR and QM FAQs.  Part One is here.  The FAQs below come directly from the most recent CFPB guidelines for January 2014.  As I go through the rules I will supplement the FAQs.  This information does not apply to the Big Banks, e.g. B of A, Morgan Stanley, JPMorgan, etc.  Rather, it applies to “small creditors” such as community banks. Unfortunately, the regulators have sought to apply the ATR/QM rules even to Mom and Pop who may sell an occasional rental unit or two.[1] The CFPB gives “small creditors” or “small entities” certain underwriting latitude in the application of the ATR/QM rules. Generally, these are persons or entities with no more than $2 billion in assets that make no more than 500 mortgage loans per year.  Originally, the small entity exceptions were intended to apply only to “rural or underserved counties,” but until January 10, 2016, the exceptions will apply to all small creditors, regardless of location. Caveat: This material below is informational only and does not constitute “legal advice.”  Moreover, it is summary only, and for more information, the actual regulations should be reviewed.  ~PCQ  [For full article, go to link here.]

[To be continued.]