ATR QM RULE FULL
ATR QM RULE VERIFICATION

ATR QM RULE VERIFICATION

Under the amendments, the creditor must still determine whether the consumerвЂ™s income level can be reasonably expected to continue, but the creditor may assume that salary or wage income can be reasonably expected to continue if it verifies current employment and income, and the verification does not indicate that employment has been or is set to be terminated. In one of the more significant changes, the CFPB eased the general requirement that a creditor determine that the consumerвЂ™s income is вЂњreasonably expectedвЂќ to continue through at least the first three years of the loan. Stability of income takes precedence over stability of employment, so job changes within the same line of work with advances in income or benefits may be favorably considered. A creditor may assume employment will continue if current employment is verified unless the verification indicates otherwise.

ATR QM RULE FULL

When analyzing a consumerвЂ™s employment history and stability of income, the creditor must examine the consumerвЂ™s past employment record verifying employment for the most recent two full years with allowances for school, seasonal employment and explained gaps in employment and obtain confirmation of current employment. The amendments eliminated those specific requirements. When assessing the stability of a consumerвЂ™s income, Appendix Q as originally issued required the creditor to evaluate the consumerвЂ™s probability of continued employment by analyzing, among other things, the consumerвЂ™s past employment record, qualifications for the job, and past training and education, and the creditor was required to obtain a confirmation from the employer that the consumerвЂ™s employment would continue. The amendments to Appendix Q deal with several different subjects including: stability of income and the equirement that the creditor evaluate the probability of the consumerвЂ™s continued employment the requirement that the creditor also determine whether the consumerвЂ™s wages, salary or other forms of income can reasonably be expected to continue creditor analysis of overtime, bonus, self-employment, and social security income and requirements related to non-employment related income such as trust income and rental/investment property income. Z, the consumerвЂ™s DTI ratio may not exceed 43%, and a creditor must use the standards in Appendix Q to verify and document a consumerвЂ™s income and debt and calculate the DTI ratio. In order to satisfy the requirements for a QM under Reg. Amendments to Appendix Q (Standards for Determining Monthly Debt and Income). The amendments will be effective with the effective date of the mortgage rules on January 10, 2014. The amendments also include several changes and clarifications to the mortgage servicing and escrows rules that were issued last January. The CFPB proposed the amendments in April in response to industry concerns in an attempt to ease the compliance difficulties. As originally issued, Appendix Q was modeled on the FHA insurance underwriting manual, and the CFPB acknowledged that some provisions were not well suited to serve as strict regulatory requirements. Among the amendments to the ability-to- repay/qualified mortgage (QM/ATR) rule issued by the CFPB on July 10 were changes to the detailed requirements in new Appendix Q for determining whether the consumerвЂ™s monthly income and debt satisfies the 43% DTI limit for making a qualified mortgage (QM).

Atr qm rule