This is a single-family/residential course.
The landscape of the mortgage lending industry has changed dramatically over the past few decades. Prior to the financial crisis of the late 2000s, mortgage lenders offered a variety of products that provided alternatives to standard, fixed-rate mortgages. During the crisis, lenders tightened their underwriting guidelines and stuck to more traditional mortgage products. As the economy and housing markets began showing signs of recovery, a resurgence of alternative lending products also followed. However, new legislation introduced by The Dodd-Frank Act has restricted some of the more risky options, as well as those that are considered to be predatory to consumers.
The housing industry is very cyclical in nature, driven by economic and social factors such as unemployment rates, varying interest rates, housing growth, stock market volatility, and changes in consumer confidence. Therefore, it is important to understand the variety of products that are available and how they can be used to help borrowers purchase homes.
Underwriting Reduced Payment Products and Piggyback Loans provides a historical perspective of reduced payment products and the risks underwriters face when evaluating these loans. However, this course is not intended to provide guidance on the Dodd-Frank Act's Ability to Repay (ATR) rule, including Qualified Mortgage (QM) requirements, as some of the reduced payment options mentioned are not considered QM-compliant. Be sure to check lender guidelines to determine eligibility for specific lenders.
This course also discusses piggyback mortgage loans as an alternative to maximum mortgage finance. While piggyback loans are not as widely available as before the housing crisis, some local banks and credit unions may still offer these types of loans.
Case Study 1
Case Study 2
Seat time approximately one (1) hour.