January 2014 will be a very interesting month for everyone in the mortgage industry. The new “Qualified Mortgage” or QM rule is expected to take effect, and while we don’t yet know exactly how it will be implemented or what impact it will have, we do know it will create widespread change. QM is basically a new definition for what constitutes a qualified mortgage. The biggest change is here is expected to be a lower threshold for the debt to income ratio, or the amount of monthly debt obligations an applicant can have relative to their income.

More Information can be found here, http://www.qualifiedmortgage.org/definition/, but this diagram is helpful.

qm-infographic

This massive wave of regulation will force lenders and banks to adjust and adapt. New products and lenders should open up to fill any voids created by these new rules.

It is times like these where I am thankful to be an independent mortgage broker with many diverse lending relationships. However this shakes out, I will be able to source and secure the best financing options to serve your needs. 

There are also many other federal government regulations expected to take place. The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law by President Obama in July 2010.  Many of its provisions regarding mortgage lending go into effect on January 10, 2014. The changes relate to HOEPA, or High-Cost Loans, HPML Escrow and Appraisal Requirements, Ability-To-Repay/Qualified Mortgage, mortgage servicing, Reg B Appraisal Requirements, and Loan Originator Compensation.

 

About the Author ~ Since 2003, Beau has been a mortgage professional and has successfully closed over $100 Million in mortgages. He is the Founder and Senior Mortgage Advisor at Transparent Mortgage and has worked for Luxury Mortgage, Bank of America and Impac Funding. Beau is truly committed to serving the needs of his clients and raising the industry standards for integrity and transparency.

Questions, Comments, or Personalized Rate Quote? Contact Beau today: 949.230.9358  or beau@tspmortgage.com

Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.