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| | | Forum Newbie
Group: Forum Members
Last Login: 9/12/2007 12:04:44 PM
Posts: 1, Visits: 4 |
| These changes were announced in Freddie Mac and Fannie Mae’s July 13, 2007 Bulletins with an effective date of September 13, 2007 for all Initial Interest Mortgages that have loan application dates on or after this date. They are making the changes to their requirements for nontraditional Mortgages in order to be consistent with the practices referenced in the Guidance. In the bulletin, it stated that the borrower must be qualified using a monthly housing expense that includes, but is not limited to, the principal and interest payment on the Mortgage that is calculated in accordance with the Guide. For the purpose of qualifying the borrower, the principal and interest payment must be based on a fully amortizing payment schedule for the term of the Mortgage. I don’t see that Point has made those changes on the App and Transmittal to reflect the P&I payment of the Interest-Only loans. When will this happen anytime soon since the effective date is this week? Along with this, the Guidance requires financial institutions to ensure that borrowers have sufficient information to clearly understand loan terms and associated risks prior to making a product or payment choice. The Agencies published illustrations intended to assist financial institutions to provide the consumer information discussed in the Guidance (Fed Reg Vol. 72, No. 110, pages 31825-31832.) Will Point be providing those Fact notices for users on the Interest-Only and Subprime ARMs? |
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| | | Forum Newbie
Group: Forum Members
Last Login: 2/3/2008 8:04:54 AM
Posts: 4, Visits: 86 |
| | Point is compliant with the Federal Reserve Guideance on Non-traditional mortgages. Short term arms (Less than 5 years) are qualified at the greater of the fully indexed rate or 2% above the start rate. Interest only loans are qualified based on P&I. If you have a short term interest only loan you must qulaify the P&I payment at the greater of the fully indexed rate or 2% above the start rate. Here is how to do it in Point - Go to the Truth-In-Lending Screen. If the loan is a short term arm (Less than 5 years) Enter the greater of 2% above the start rate or the fully indexed rate into the "qualifying rate" field. If the loan has an interest only feature, enter the number of months the loan is interest only. Make sure the check box "Qualify Ratios at the Interest Only Payment" is UNCHECKED. Now your TIL will be correct for disclosure purposes and your 1008 will be correct for qualifying purposes. On your second issue relative to additional disclosure of loan features, an actual form has only been proposed by a committee formed by the Federal Reserve Board, but has not been approved nor is it required. However, I would caution many states have passed new legislation this year wherein all terms of the mortgage must be disclosed at or shortly after application. Refer to your state(s) laws for further guidenace. Hope this helps.
Scott Tennell
Continental Capital Funding
Florida |
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