Reg Z ATR – General ATR and Debt

Compliance > Regulation Z - TILA > Ability to Repay / Qualified Mortgages
Q:  What do I include on the debt side of the debt-to-income ratio when determining ATR?
 
A:  In assessing a consumer’s ATR, four underwriting factors help you evaluate the consumer’s debts. You will need to find out the consumer’s total monthly payments for:
 
1. The loan you are underwriting
 
2. Any simultaneous loans secured by the same property
 
3. Mortgage-related obligations – property taxes; insurance required by the creditor; fees owed to a condominium, cooperative, or homeowners association; ground rent or leasehold payments; and special assessments
 
4. Current debt obligations, alimony, and child support
 
Once you have the total debt figure, you will use it, along with the consumer’s total monthly income, to calculate the monthly debt-to-income ratio or residual income.
 
Include ongoing, required monthly, quarterly, or annual debts of the consumer.
 
Do not include debts paid off at or before consummation.
 
 
 
ADDITIONAL INFORMATION – CFPB ATR/QM Compliance Guide - http://files.consumerfinance.gov/f/201603_cfpb_atr-qm_small-entity-compliance-guide.pdf
 

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