ONTARIO, Calif.--(BUSINESS WIRE)--Eric Ahlgrim and his fiancée Summar can celebrate Valentine's Day and move forward with their wedding plans thanks to First Mortgage Corporation (FMC). Just a few weeks ago, however, they thought their dreams were ruined after a home loan initially approved by one of the 'big four' banks fell through when it couldn't be completed before the start of the Qualified Mortgage (QM) Rule.
The QM Rule, initiated by the Consumer Financial Protection Bureau (CFPB), took effect January 10. Under the Rule, borrowers whose debt-to-income (DTI) ratio exceeds 43%, as well as those self employed, may not be considered a 'qualified' loan. The Rule is meant to protect borrowers from lenders who issue loans that borrowers cannot repay. It does not preclude lenders from making loans to higher-DTI borrowers nor to the self employed. Still many lenders shy away from such loans because of the extra work needed to discern the risk involved. Because Ahlgrim's fiancée is self employed, the couple was told they would no longer qualify for the home they were already in the process of buying.
“Summar and I were absolutely devastated when we heard the news,” said Ahlgrim. “Thankfully Summar had kept the number of Peter Howell at FMC. We had talked to him before deciding to go with the larger lender.”
Ahlgrim said they called Howell to see if FMC might be able to help salvage the purchase of their dream home (and, in turn, their upcoming wedding).
“Peter's manager Angel Nunez assured us they could help. Peter was on top of everything from day one. Angel kept the ball rolling too, fighting any obstacles that came up; the processor Jana Townsend must not have slept. They had answers for us before we thought to ask them... they walked us through breathing exercises when we stressed out and they closed our loan in just 10 days.”
“There is a knee-jerk reaction by many lenders who believe the QM Rule makes lending to these borrowers too difficult or too risky to be worth the effort,” said FMC President Clem Ziroli Jr. “At FMC we have always done the hard work of manual underwrites and determining the risk of such loans and we've done it well. While two-thirds of our loans are to underserved borrowers, our serious delinquency rate is well below that of the 'big four' banks.”
Ziroli stressed that it has always been a part of FMC's mission to serve borrowers who don't easily meet the lending overlays imposed by larger lenders. “Couples like Eric and Summar may not fit easily into the bigger lenders' picture but FMC welcomes them,” added Ziroli.
“We are getting keys for our new home soon. Now we can get married, move in and start a family of our own. None of this would have been possible without First Mortgage,” said Ahlgrim.