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QM Small Creditor Flow Chart

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QM Small Creditor Flow Chart SSmmaallll CCrreeddiittoorr QQuuaalliiffiieedd MMoorrttggaaggeess RReefflleeccttss rruulleess iinn eeffffeecctt oonn MMaarrcchh 11,, 22002211 bbuutt ddooeess nnoott rreefflleecctt aammeennddmmeennttss mmaaddee bbyy tthhee EEccoonnoommiicc GGrroowwtthh,, RReegguullaattoorryy RReelliieeff,, aanndd CCoonnssuummeerr PPrrootteeccttiioonn AAcctt.. Type of Compliance Presumption: SmSmaallll CCrreeddiitotorr QQuuaalliifificcaatitioonn Loan Features Balloon Payment Features Underwriting Points and Fees Portfolio Higher-Priced Loan Did you do ALL of the following?: Did you and your affiliates: Did you and your affiliates who Does the loan have ANY of the Rebuttable Presumption At the time of consummation: are creditors that extended following characteristics?: (1) Consider and verify the consumer’s YES Applies Extend 2,000 or fewer first-lien, closed- Does the loan amount fall within the following covered transactions during the Potential Small debt obligations and income or assets? STOP end residential mortgages that are points-and-fees limits? Was the loan subject to forward last calendar year have: (1) negative amortization; Creditor QM [via § 1026.43(c)(7), (e)(2)(v)]; = Non-Small Creditor QM (QM is presumed to comply subject to ATR requirements in the last YES commitment? AND YES YES = Non-Balloon-Payment QM with ATR requirements if calendar year? You can exclude loans Points-and-fees caps (adjusted annually) Assets below $2 billion (as annually OR AND it’s a higher-priced loan, but YES [§ 1026.43(e)(5)(i)(C), (f)(1)(v)] that you originated and kept in portfolio consumers can rebut the adjusted) at the end of the last STOP If Loan Amount ≥ $100,000, then = 3% of total or that your affiliate originated and kept (2) interest-only features; (2) Calculate the consumer’s monthly presumption by showing calendar year? = Non-QM If $100,000 > Loan Amount ≥ $60,000, then = $3,000 in portfolio. payment on the loan? insufficient residual income If $60,000 > Loan Amount ≥ $20,000, then = 5% of total [§ 1026.43(e)(5)(i)(D), (e)(6)(i)(B), OR [via § 1026.43(e)(2)(iv) (Small Creditor YES based on information [§ 1026.43(e)(5)(i)(D), (e)(6)(i)(B), If $20,000 > Loan Amount ≥ $12,500, then = $1,000 NO (f)(1)(vi)(C)] QMs); available at the time of (f)(1)(vi)(B)] If Loan Amount < $12,500, then = 8% of total (3) a loan term of more than 30 years. Potential Balloon- (f)(iv)(A) (Balloon-Payment QMs)]; consummation) YES Balloon-Payment QM Special Features: Payment QM [§ 1026.43(e)(2)(iii), (e)(3), (e)(5)(i)(A), (f)(1)(i)] [§ 1026.43(e)(2)(i)-(ii), (e)(5)(i)(A), Does the loan have ALL of the following AND Is the loan still held by the [§ 1026.43(e)(1)(ii)] (f)(1)(i)] characteristics?:** originating creditor? NO NO NO (3) Consider the consumer’s monthly (1) loan term of 5 years or longer? debt-to-income ratio (DTI) or residual [§ 1026.43(f)(1)(iv)(C)]; income (RI)? Did you and your affiliates who are NO Did you and your affiliates: [via § 1026.43(c)(7), (e)(2)(vi) (Small NO The loan is a Small Creditor creditors that extended covered AND YES Creditor QMs), (f)(iv)(A) (Balloon- QM or a Balloon-Payment QM. transactions during the applicable Extend 2,000 or fewer first-lien closed- Payment QMs)] Is it a "higher-priced" loan for calendar year have: end residential mortgages that are subject (2) an interest rate that does not increase? If the loan was transferred after QM purposes? to ATR requirements in either of the YES [§ 1026.43(f)(1)(iv)(B)]; consummation, was it either: Assets below $2 billion (as annually AND YES immediately preceding calendar years? [§ 1026.43(e)(5)(B), (f)(1)(iii)] A Small Creditor or Balloon- adjusted) at the end of either of the two You can exclude loan that you originated Does the loan include a AND (1) Sold more than three years after Payment QM is higher-priced if immediately preceding calendar years and kept in portfolio or that your affiliate balloon payment? Was at least one of your consummation? the APR, when the interest rate originated and kept in portfolio. (3) substantially equal payments calculated organization's first-lien covered is set, exceeds the APOR by 3.5 [§ 1026.43(e)(5)(i)(D), (e)(6)(i)(B), NO NO using an amortization period of 30 years or YES transactions in the prior year (2) Sold—at any time—pursuant to a percentage points or more. (f)(1)(vi)(C)] [§ 1026.43(e)(5)(i)(D), (e)(6)(i)(B), less? [§1026.43(f)(1)(iv)(A)]; secured by a property in a rural or supervisory action or agreement? (f)(1)(vi)(B)] underserved area? [§ 1026.43(b)(4)] AND [§§ 1026.43(e)(6), (f)(1)(vi), (3) Transferred—at any time—as part of a 35(b)(2)(iii)(A)] merger or acquisition of or by the creditor? or NO YES YES (4) per your determination, the consumer is (4) Sold—at any time—to another creditor who NO able to make the scheduled periodic payments (including mortgage-related meets the criteria for: obligations) other than the balloon Did you receive the Safe Harbor Applies st payment? (a) [Small Creditor QM] Number of originations Not Eligible to originate Balloon-Payment QMs application before April 1 NO [§ 1026.43(f)(1)(ii)] (< 2,000) and asset size (below $2B)? NO and/or Small Creditor QMs of the current year? NO STOP STOP (QM is conclusively STOP = Non-Small Creditor QM = Non-Small Creditor QM presumed to comply with = Non-QM (b) [Balloon-Payment QM] Number of Eligible to originate General QMs, loans that NO = Non-Balloon-Payment QM originations (< 2,000), asset size (below $2B), = Non-Balloon-Payment QM ATR requirements when it become Seasoned QMs (for applications received and operating in rural or underserved is not a higher-priced loan) on or after March 1, 2021) and/or Temporary GSE STOP communities (at least one of the organization’s NO QMs (for applications received prior to expiration) = Non-QM first-lien covered transactions in the prior [§ 1026.43(e)(1)(i)] calendar year was secured by a property in a "Rural" OR "Underserved" area)? v2.0, 2/2021 | 1 [§ 1026.43(e)(5)(ii), (f)(2)] Small Creditor Qualified Mortgages Reflects rules in effect on March 1, 2021 but does not reflect amendments made by the Economic Growth, Regulatory Relief, and Consumer Protection Act. Type of Compliance Presumption: Small Creditor Qualification Loan Features Balloon Payment Features Underwriting Points and Fees Portfolio Higher-Priced Loan Did you do ALL of the following?: Did you and your affiliates: Did you and your affiliates who Does the loan have ANY of the Rebuttable Presumption At the time of consummation: are creditors that extended following characteristics?: (1) Consider and verify the consumer’s YES Applies Extend 2,000 or fewer first-lien, closed- Does the loan amount fall within the following covered transactions during the Potential Small debt obligations and income or assets? STOP end residential mortgages that are points-and-fees limits? Was the loan subject to forward last calendar year have: (1) negative amortization; Creditor QM [via § 1026.43(c)(7), (e)(2)(v)]; = Non-Small Creditor QM (QM is presumed to comply subject to ATR requirements in the last YES commitment? AND YES YES = Non-Balloon-Payment QM with ATR requirements if calendar year? You can exclude loans Points-and-fees caps (adjusted annually) Assets below $2 billion (as annually OR AND it’s a higher-priced loan, but YES [§ 1026.43(e)(5)(i)(C), (f)(1)(v)] that you originated and kept in portfolio consumers can rebut the adjusted) at the end of the last STOP If Loan Amount ≥ $100,000, then = 3% of total or that your affiliate originated and kept (2) interest-only features; (2) Calculate the consumer’s monthly presumption by showing calendar year? = Non-QM If $100,000 > Loan Amount ≥ $60,000, then = $3,000 in portfolio. payment on the loan? insufficient residual income If $60,000 > Loan Amount ≥ $20,000, then = 5% of total [§ 1026.43(e)(5)(i)(D), (e)(6)(i)(B), OR [via § 1026.43(e)(2)(iv) (Small Creditor YES based on information [§ 1026.43(e)(5)(i)(D), (e)(6)(i)(B), If $20,000 > Loan Amount ≥ $12,500, then = $1,000 NO (f)(1)(vi)(C)] QMs); available at the time of (f)(1)(vi)(B)] If Loan Amount < $12,500, then = 8% of total (3) a loan term of more than 30 years. Potential Balloon- (f)(iv)(A) (Balloon-Payment QMs)]; consummation) YES Balloon-Payment QM Special Features: Payment QM [§ 1026.43(e)(2)(iii), (e)(3), (e)(5)(i)(A), (f)(1)(i)] [§ 1026.43(e)(2)(i)-(ii), (e)(5)(i)(A), Does the loan have ALL of the following AND Is the loan still held by the [§ 1026.43(e)(1)(ii)] (f)(1)(i)] characteristics?:** originating creditor? NO NO NO (3) Consider the consumer’s monthly (1) loan term of 5 years or longer? debt-to-income ratio (DTI) or residual [§ 1026.43(f)(1)(iv)(C)]; income (RI)? Did you and your affiliates who are NO Did you and your affiliates: [via § 1026.43(c)(7), (e)(2)(vi) (Small NO The loan is a Small Creditor creditors that extended covered AND YES Creditor QMs), (f)(iv)(A) (Balloon- QM or a Balloon-Payment QM. transactions during the applicable Extend 2,000 or fewer first-lien closed- Payment QMs)] Is it a "higher-priced" loan for calendar year have: end residential mortgages that are subject (2) an interest rate that does not increase? If the loan was transferred after QM purposes? to ATR requirements in either of the YES [§ 1026.43(f)(1)(iv)(B)]; consummation, was it either: Assets below $2 billion (as annually AND YES immediately preceding calendar years? [§ 1026.43(e)(5)(B), (f)(1)(iii)] A Small Creditor or Balloon- adjusted) at the end of either of the two You can exclude loan that you originated Does the loan include a AND (1) Sold more than three years after Payment QM is higher-priced if immediately preceding calendar years and kept in portfolio or that your affiliate balloon payment? Was at least one of your consummation? the APR, when the interest rate originated and kept in portfolio.
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