House Calls…

Special Edition

As you know, important changes to the mortgage lending process will go into effect this January as result of the Dodd-Frank Act. As a reminder, the Dodd-Frank Act directed the Consumer Financial Protection Bureau (CFPB) to implement new rules in an effort to protect and inform consumers. Some aspects of the rules are complicated and certain niche products, like interest-only loans, may become less widely available. Even so, EverBank believes access to credit for qualified borrowers will not change dramatically.

Many of the practices outlined in these rules are already part of our current processes and guidelines. We’ve always focused on sound lending practices, which are at the core of the Ability to Repay (ATR) – Qualified Mortgage (QM) directive. In defining our approach to ATR/QM, we have sought a reasonable balance that will allow us to continue to provide a wide range of financing alternatives to our qualified clients.

Highlights of how the new rules will impact EverBank’s product offering are as follows:

  • The EverBank Preferred Portfolio JumboSM ARM programs will continue substantially as they are today. We will continue to offer an interest-only option, and DTI ratios above 43% will be allowed for qualified borrowers. We will also continue to offer an asset dissipation option for our clients consistent with our existing policy.
  • While EverBank will be offering non-QM options within our Preferred ARM programs, we expect secondary market liquidity for non-QM loans to be very limited. As a result, DTI’s above 43% and asset dissipation will no longer be allowed on our Preferred Fixed Rate products.

The following is a summary of the new CFPB rules:

FNMA and FHLMC have indicated they will only buy QM loans, given this there may be limited secondary market options for non QM loans. QM loans are defined as:
Total debt-to-income ratio less than 43% in most situations
Underwriting requirements documented and verified
Not allowed: interest only period in most situations, negative amortization, balloon payment, term longer than 30 years


Appraisal disclosure and delivery:
Lender must tell consumer within three business days of receiving the application that they will receive a free copy of the appraisal
Appraisal must be delivered promptly after it’s completed, or three days before the loan closes—whichever is earlier


Appraisal rules for higher priced loans:
Performed by a certified or licensed appraiser, inside of home must be reviewed
Lender must receive a written appraisal, provides a free copy to borrower at least three days before closing


Homeownership counseling:
Lenders must give the applicant a list of approved homeownership counseling agencies within three business days of receiving an application


HOEPA – High cost loans:
High cost testing now applies to purchase transactions, not just to refinance applications
The APR and Points & Fee threshold tests have been changed

EverBank will implement these changes, not just because we have to, but also because it is good for our clients. We live by the rule of putting our clients first. As such, we do not anticipate the new rules to significantly impact how we extend credit. Tom Wind, our Executive Vice President of EverBank Home Lending, offers his perspective below.

“In the years since the financial crisis, many changes have been made to the mortgage process. As a result, I think there have been some misconceptions that mortgage credit isn’t widely available, even to highly qualified borrowers. That’s not the case today. Documenting the ability to repay, which has always been a cornerstone to quality mortgage lending, is not expected to change that.”


Contact me to learn more
Call 415-423-1424




Patrick Gardner
Mortgage Loan Officer
NMLS ID: 378888
Email me
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