In a nutshell, the ATR strives to ensure qualification
for borrowers, fees and points are not excessively charged, debt-to-income
(DTI) ratios are capped, higher qualification rates on adjustable rate mortgage
(ARM) loans, elimination of interest-only programs, and that loan terms no
longer extend to 40 years.
At Redondo Mortgage Center, these checks and balances have
long been in place and implemented. RMC’s internal quality control calls for
the issuance of a Good Faith Estimate (GFE) which discloses points, fees, and
other closing charges to show borrowers that they are not being excessively
charged as the ATR stipulates. Prior to releasing a pre-approval, RMC is
required to underwrite files that rigorously checks the borrower’s credit,
income, collateral and all other factors ATR is enumerating that needs to be
verified. This does not only ensure that the borrower can legitimately shop for
a home, but that he or she is qualified to avail of financing. In the South Bay,
pre-approvals from RMC are widely honored with confidence by real estate agents.
Being in the industry for nearly 25 years is indicative of RMC integrity.
RMC believes in giving all those qualified, the
opportunity to avail of a home. If it is found that a borrower is not ready to
purchase a property, RMC will not recommend getting into a home loan. But instead,
its officers guide prospects through the preparation so they may be ready for
the homebuying process. Only at the appropriate time and with the right
qualifications will RMC facilitate the financing process.
While there is quite a buzz about the stringent
guidelines of QM, rest assured, RMC has already been long facilitating
transactions under strict, internal quality control. And while others may find
it quite an adjustment, we at RMC have already mastered our compliance,
allowing no downtime in closing loans.
For reference and a guide to QM and ATR please click on
the link: http://www.consumerfinance.gov/blog/qualified-mortgages-explained/
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