How to Manage QM Policies

Use this procedure to view, add, edit, copy, and delete QM policies.

1. In the Configuration site, select the appropriate business channel entity from the Entity Selection menu.

2. From the Entity Selection tab, click Manage QM Policies.

3. Do one of the following:

• To edit, view, delete, or copy an existing policy, click the hourglass icon next to the appropriate policy.

• To add a new policy, click Add New Policy. 

4. If you created a new policy, enter the appropriate policy name in the Policy Name field.

5. In the QM vs. Non-QM Analysis section, select the appropriate QM option. 

6. In the Start/Par Price section, select the appropriate value:  

• Select the first price above par—If there is no price above par, the first price below par will be used.  This will be a forced discount.

• Select the price closest to par—If the closest price above par and below par are the same distance from par, the price above par will be selected.

7. In the LLPAs section, select the appropriate option:

• Display LLPAs to LO—This option displays the adjustment to the LO in both Optimal Blue and the LOS. LLPAs are included in allowable points and fees calculations.

• Hide LLPAs from the LO—This option hides the adjustment from the LO in Optimal Blue and the LOS, but shows the adjustment to Secondary. LLPAs are not included in allowable points and fees calculations.

• Only show positive LLPAs to the loan originator—This option hides negative LLPAs from the LO and excludes them in points and fees calculations.

• Display LLPAs to the loan originator, do not use in points and fees calculation—This option displays all LLPAs to the LO and excludes LLPAs in calculations.

8. In the SRPs section, select the appropriate option:

• Display SRPs to the loan originator—This option displays SRPs to the LO in both Optimal Blue and the LOS, and values are included in allowable points and fees calculations.

• Hide SRPs from the loan originator—This option hides SRP adjustments from the LO where this policy is applied (with respect to the show/hide option in Entity Preferences.) When this option is selected, SRP data is sent to the LOS for Secondary.

• Only show positive SRPs to the loan originator—This option hides negative SRPs from the LO and excludes negative SRPs in points and fees calculations.

• Display SRPs to the loan originator, but do not use in points and fees calculation—This option displays all SRPs to the LO and excludes SRPs in calculations.

9. In the APOR Date section, select an option based on these definitions:

• Keep APOR Date From the Lock Date—This option makes the APOR Date field on the 2ndary Options page read-only (when reviewing a lock request) and saves the original lock request date as the APOR date. If Secondary re-prices a loan with a different lock date, the original lock request date does not change.

• Let Secondary Change the APOR Date—This option makes the APOR Date field on the 2ndary Options page editable. The Secondary user can overwrite the original lock request date as the APOR date when re-pricing a loan on a different date.

10. In the Auto Accept section, select an option based on these definitions:

• Auto Accept Non-QM Loans if Non-QM Loans are displayed in search result—If using the Auto Accept feature and if Non-QM loans to display in search results is selected, the system automatically approves lock requests on Non-QM loans. (The setting for displaying non-QM loans is shown in the QM vs. Non-QM Analysis section on this screen.)

• Do Not Auto Accept Non-QM Loans—This requires a Secondary approval on all non-QM loan lock requests.

11. In the Higher Rate with Worse Price section, the user can remove higher rates that have worse pricing than lower rates. This sometimes happens when doing blended pricing across GNMA I and II.

12. In the Points and Fees Calculation section, select how to display the points and fees decimal places.

13. Based on interpretation, investment properties either must meet QM or can be exempt from the test. Select the appropriate option.

14. In the Discount Points section, determine if discount points follow the same logic as prepaid finance charges that should be used to derive the QM Loan Amount (sometimes called “Total Loan Amount”).

15. In Application Date section, determine if loans with an app date prior to January 10, 2014 are exempt from the QM check or if they must meet the QM test.

16. HPMLs are considered QM but not Safe Harbor which means that the lender must prove due diligence if the borrower defaults. Use this section to process HPMLs by allowing locking and to determine if Non-Safe Harbor loans will be notated with the HPML icon.

17. Select the Use First Lien Amount or Use QM Loan Amount option when evaluating the loan minimum and loan maximum. From the Limits section, enter the appropriate Lender Limit Percentage in the Lender Limit column.

18. In the Excludable Bona Fide Discounts Points, adjust the percentage of bona fide discount points an investor might deem as excludable from the points and fees test. The table’s default values represent the CFPB ruling. Enter the appropriate Excludable Bona Fide Discounts Points to make adjustments for any given product or investor.

19. Optimal Blue can enforce a Secondary practice that governs the amount of bona fide discount points charged for a given rate reduction. Points above the bona fide discount points charged for a given rate are considered non bona fide discount points and applied to the points and fees test. In the Bona Fide Discount Points, select to either bypass this enforcement or enter the appropriate Bona Fide Discount Point Percentage.

20. Click Save Policy.
    

21. Do one of the following:

• If you want to apply the policy to all products in the currently selected entity, click Apply to All.

• If you want to apply the policy to particular products, click Back to Policy List and continue with the procedure in the Assign a Policy to Entity article.