Dodd-Frank Wall Street Reform and Consumer Protection Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in the summer of 2010. The act created minimum standard for mortgages including the Ability to Repay rule and a Qualified Mortgage definition. These rules were adopted by the Consumer Financial Protection Bureau CFPB in 2014. Non -QM loans were thus created and include alternative income documentation using bank statements to show income, interest only, DTI above 43%, high cost loans, balloon payments, non- owner- occupied, and jumbo loan amounts.

Owner Occupied Consumer loans using alternative income documentation fall inside the Dodd Frank guidelines of “Ability to Repay”. A typical borrower under this program is self-employed, has good credit, has adequate cash flow in their business or personal life, yet wants to avoid the hassle of providing full documentation and tax returns required in conventional financing.