As many have heard, on January 10th, big changes took place in the mortgage industry. Thanks to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, there are new requirements for virtually all closed-end conventional residential mortgage loans.
The changes are massive, but the most talked about change involves a category of loans called Qualified Mortgages or QM for short.
The QM rule was developed to give lenders some clarity and protection against litigation. If your loan meets the QM standards which include limited points and fees, 43% max debt-to-income ratio, 30 year max term, and is not an interest only loan (which most loans already comply), then lenders are protected from potential lawsuits.
What this means to you is the Underwriting process will become more complex, and will probably result in fewer choices for some consumers. If your loan falls outside the QM guidelines, the options, terms and availability will be different. But don't despair, it's still the perfect time to buy, sell or refinance. Learn more at liveurbandenver.com/qmrule.
Thanks to Jim Bonner, CMPS, VP of Mortgage Banking/Senior Mortgage Planner with Commerce/Mortgage. Contact Jim at 303.359.5920 or jbonner@commercemtg.com. LMB #100009587 NMLS #328326. Regulated by the Colorado Division of Real Estate.
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