Phil Grossfield's Blog

A LITTLE EXTRA…

Qualified Mortgage

qualifiedmortgageMy Schedule…and A Little Extra:    I am setting up new appointments for the next several weeks…please let me know if you’re interested in an office visit.  I will be sharing my insight on how to get new business in 2013 and what to prepare for as the year progresses.  |||  You’ve heard the term Qualified Mortgage, right?  Well I know you’ve heard the term Safe Harbor.  Qualified Mortgage or “QM” is a standard that lenders might need to adhere to…and if we lend outside of that standard we would not be within the safe harbor.  So, what entails QM?  You got me.  The only rule I’m aware of at this time is the borrower cannot pay more than 3 points.  What is included in the 3 points is at question.  But if they further try defining what a QM is, meaning the borrower must have certain criteria in order to get a mortgage, its gonna create chaos.  This is what Mitt Romney was talking about in the first presidential debate which I was happy to hear him bring up.  No matter how hard or diligent they try to define a qualified mortgage, there are just too many variables at play.  I mean, as it stands we have a pretty tight lending box with Fannie…even so, there are real life situations that should be taken into consideration.  But most of the time we can’t because it’s too risky with the threat of a repurchase.  I envy my friends at BOFI Federal Bank (Bank of Internet) since they can write true portfolio loans without concern for agency restrictions…in other words, they get to use common sense.  Do we use common sense?  Not if we can avoid it.  So when I hear that someone might be trying to define a mortgage more than its already been defined, I get queasy. Check out www.robchrisman.com for a good write up.

My Schedule:  I am available all day today….. Please let me know if you’re interested in an office visit over the next several weeks…I am setting up appointments now….

My Market Watch:  Rates are the same as yesterday but the stock market is on the move.  Also, there is a bond auction today and with no other economic reports to look at traders will use the auction to decide if bonds are worth buying or selling.  As I repeatedly type, if bonds are sold off then rates/pricing will worsen and if bonds are being bought they get better.  Today my feeling is there is more downside than upside…but that’s my conservative nature at work.   My Disclaimer

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