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Jack! You are a genius…oh my goodness, I get it now! I ran it through and it’s perfect! Just have to remember to put in 2 payment streams.
Thanks so much! Thanks to you too, Robin! Y’all have a great week!
Please discard 1st pick (Omaha Beach -scratched)…Code of Honor, Pattie Corder, Monticello Banking Company, Group 2
We too, have always taken the safe approach, but was challenged by the CEO as a result of it being identified as an exception. He contacted our primary regulatory who agreed with his approach. So, going forward we will not treat as rescindable. Unfortunately, 5 different examiners can interpret the regulation, and have different interpretations. Geez….
Thank you Rcooper, for your time and effort on this! It didn’t even occur to me to refer to the language in THE LAW. I’m thankful to have excellent resources and support from this group! 🙂
Okay, so if we have listed the retirement account in assets on the loan application, but we are not using the retirement account as verification of repayment, and therefore not including it in the debt to income ratio calculation, verification would not be required? (I apologize for beating a dead horse, I just want to be sure I’m thinking about it in the correct way.)
Thanks for your help, Robin!
Well rcooper, that is not what I wanted to hear, but I suppose I will accept it (reluctantly). LOL
Thanks again! 🙂
Thanks so much for your help rcooper,
We do not offer an introductory rate (or teaser rate) on our ARMs. The initial rate is the index (at origination) + margin.
I did a little more digging and the Federal home loan bank has defined the “fully-indexed rate” on an adjustable-rate mortgage loan as the calculation adding the margin to an index level at the time the loan is made. [Fully-indexed rate-Index (at the time the loan is made) + Margin (established at the time the loan is made)]
We use the “Small Creditor QM Portfolio Loans” exemption (1026.43(e)(5), so we must calculate D2I using the maximum interest rate during the 1st 5 years (including any rate cap effect) after the 1st regular periodic payment due date…thankfully, that’s what we are doing.
But that brings another question to mind…if we use the “inflated” debt to income figure in our ATR calculation and their current D2I is within our policy limits, but the “inflated” is not, should the officer submit a request for an approval to an exception to loan policy?
It just gets better and better…
Thanks for your input, always! 🙂
