Freddie Mac & QM

With the implementation of Qualified Mortgages (QM) and Ability to Repay (ATR), Freddie Mac has announced that Loan Prospector will be providing new feedback messages on higher priced covered transactions 7/1 and 10/1 ARMs, the higher priced covered Relief Refinance mortgages, and the Home Possible  mortgages with terms over 30 years as follows.

  • The LC message code will require the Lender to qualify the 7/1 or 10/1 ARM at the higher of the note rate or fully indexed rate, while the
  • LB code will require the Lender to manually enter the DTI and FICO in accordance with the respective 45 maximum and 620 minimum, regardless of the Debt Ratio and Indicator Score on the LP Feedback Certificate.
  • The LD message code will stipulate that mortgages with original maturities over 30 years must have Application Received dates prior to January 10, 2014 and Settlement dates prior to July 31, 2014.

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