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Can you Buy or Refinance a house with NO income?

SELF EMPLOYED MORTGAGE LENDERS QUESTIONS AND ANSWERSCategory: Bank StatementsCan you Buy or Refinance a house with NO income?
shaamrock Staff asked 1 year ago

Yes and No it depends. You can buy an investment property with no income but you must already own a home. However, you can NOT buy a primary home unless you verity you ability to make the mortgage payments. Since 2010 the government issued the qualified mortgage rules. The qualified mortgage and the Ability to Repay Rule in January 2013 to implement provisions of the DoddFrank Act. Those provisions require lenders, before making a residential mortgage loan, to make a reasonable and good faith determination that the consumer has a reasonable ability to repay the loan.

The Dodd-Frank ability to repay Wall Street Reform and Consumer Protection Act requires the Bureau of Consumer Financial Protection (Bureau) to review some of its rules within five years after they take effect. These formal reviews are called assessments. The Bureau’s 2013 Ability-to-Repay and Qualified Mortgage Rule took effect on Jan. 10, 2014, and this report publishes the findings of the Bureau’s assessment of the Rule. In general, the Ability-to-Repay a mortgage loan and Qualified Mortgage Rule requires creditors to make a reasonable, good faith determination of a consumer’s ability to repay a loan based on verified and documented information before issuing a residential mortgage loan. In its assessment, the Bureau used both its own research and external sources to evaluate the effectiveness of the Rule in meeting (1) the purposes and objectives of the Bureau and (2) the specific goals of the Rule as stated by the Bureau prior to the Rule’s effective date.

Extensions of mortgage loan credit made pursuant to certain loan programs are exempt from the ATR Ability to Repay a mortgage lender requirements.
 Extensions of mortgage loan credit made by housing finance agencies directly to consumers, as well as extensions of mortgage loan credit made by other creditors pursuant to a program administered by a CONSUMER FINANCIAL PROTECTION BUREAU housing finance agency, are exempt from the ATR Ability to Repay a mortgage lender requirements. This ATR Ability to Repay a mortgage lender exemption applies to extensions of credit made pursuant to a program administered by a housing finance agency, regardless of the funding source (e.g., Federal, State, or other sources).
 Extensions of mortgage loan credit made pursuant to an Emergency Economic Stabilization Act program, such as extensions of credit made pursuant to a State Hardest Hit Fund program, are also exempt from the ATR Ability to Repay a mortgage lender requirements.
The mortgage loan exemptions above apply to all loans made by these creditors or pursuant to these mortgage loan programs, provided the conditions for the exemption are satisfied. An exempt mortgage loan remains exempt even if it is sold, assigned, or otherwise transferred to a creditor that would not qualify for the exemption.
Note that the ATR Ability to Repay a mortgage lender requirements do not apply to these loans. Thus, a loan that is eligible for one of these exemptions is not eligible for QM status, as the QM provisions are only applicable to loans subject to the ATR Ability to Repay a mortgage lender requirements. A consumer who obtained a loan that was exempt from the ATR Ability to Repay a mortgage lender requirements would have no ability-to-repay claim under the ATR Ability to Repay a mortgage lender/QM rule.

Our reports on the Ability to Repay and Qualified Mortgage Rule and the RESPA Mortgage Servicing Rule

 

 

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