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We are considred a small creditor under the ATR rule. We have some loans that were set up on balloon payments that will mature over the next 3 years. I know we are not subject to the 43% cap, but we still have to show that we “considered” DTI. I am concerned about a situation where a balloon loan is up for renewal and the borrower’s circumstances have changed, but they are still making their payments. If their DTI now shows 55%, what are we supposed to do with the loan? Call it? I was thinking maybe non standard to standard, but balloon loans aren’t considered non standard and ARMs are considered non standard…we only offer ARMs in house now.
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