Financial regulators released the final Qualified Residential Mortgage rule (QRM) definition, intended to limit the risky credit lending that kicked off the housing crisis originally, and dropped the 20 percent down payment requirement that would have necessitated lenders keep five percent “skin-in-the-game.”

Instead lenders have to meet the general definition of a Qualified Mortgage, according to what IMHARVIC informs MHProNews, which means the loan must have:

• Regular periodic payments that are substantially equal;

• No negative amortization, interest only or balloon features;

• A maximum loan term of no more than 30 years;

• Total points and fees that do not exceed 3 percent of the total loan amount, or the applicable amounts specified for small loans up to $100,000;

• Payments underwritten using the maximum interest rate that may apply during the first five years after the date on which the first regular periodic payment is due;

• Consideration and verification of the consumer’s income and assets, including employment status if relied upon, and current debt obligations, mortgage-related obligations, alimony and child support;

• Total DTI ratio that does not exceed 43 percent. ##

(Image credit: bankrate)

(Submitted by Matthew J. Silver to Daily Business News-MHProNews)