Qualified mortgage protection was implemented last 2014 in January where it gives legal protections for the lenders who will be able to follow rules and regulations from the Consumer Protection Act as well as the Dodd-Frank Wall Street Reform. There are certain requirements to follow and it will be based on the income, assets, and debts of the borrower to know if he or she is eligible or qualified to pay the lender back. It also requires that the borrower has not accepted or received monthly debt payments that are more than necessary of the pre-tax income as well as not being charged with more than 3% in origination fees and points by the lender, and last but not least, if the loan that has been issued is not overpriced and considered risky. This rule was developed in order to enhance the quality of loans that are issued in the foremost market and are currently available for trading in subordinate markets. In addition to this, lenders should have specific protections regarding their qualified mortgages for only a few qualified mortgages will qualify for sale in a subordinate market.
According to Michael Nierenberg, his company knows how to incorporate securities and protection for non-qualified mortgages when it comes to investing or current business.
Benefits of Non-Qualified Mortgages
CEO Michael Nierenberg is happy to say that New Residential Investment Corp. specializes in meeting the standards that are built by the federal government agencies and understanding that the traditional process of mortgage loans might be unyielding. Michael Nierenberg focuses on increasing the number of mortgage choices for loans that are beyond traditional methods. He saw how qualified mortgages have been a rising problem within the country, and what makes his strategy for non-qualified mortgages effective is the various and flexible processes that they require and better underwriting guidelines.
After a recent interview with Michael Nierenberg, it can be seen on the recent data that has been published by a worldwide credit rating agency that the figures for loan performance on qualified mortgages and non-qualified mortgages are approximately equivalent. However, all of the late payments will have different rates due to delinquency.