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EDUCATE – INFORM – ADVOCATE

IMLA has three directives. We educate, we inform, and we advocate. IMLA educates, informs, and advocates so our members can concentrate on helping Idaho families achieve their dreams of homeownership. We provide up to date and relevant education to our members. We keep our membership informed of upcoming changes, both regulatory and legislative. We are the voice of the industry, keeping abreast of and help mold legislative changes at the local, state, and federal levels. Conceived in 1974 by a group of mortgage bankers who foresaw the value of building a strong network of real estate finance professionals, the Association has grown into an organization which is the resource point for the real estate lending industry in Idaho.

Articles and Announcements:

During the 2020 Idaho legislative session the statute establishing the April 15th deadline (63-602G) for application to qualify for the homeowner’s exemption was changed with H562 removing the arbitrary deadline. Starting in 2021, applications for the homeowner’s exemption will be processed based on the date of application. What this means for individuals purchasing a primary residence is a few things:
If the property purchased did not previously have a homeowner’s exemption and it is purchased after April 15th the new owner can still apply for and receive the exemption for the remainder of the year after the application has been accepted by the county.
If the property purchased did previously have the homeowner’s exemption it is critical that the new owner apply for the exemption immediately upon closing as any delay in applying will reduce the time the exemption is in place for the year of the transaction.
If the property purchased is new construction the same deadlines apply (30 days) for application of the exemption to reduce the occupancy tax owed for the ­first year. After the fi­rst calendar change the home will go on the regular property tax rolls just as it currently does.
Examples:
Buyer 1 purchases an existing home for their primary residence that currently does not have the exemption in place. They close on July 25th and apply for the exemption on August 1. The county will process the exemption for the prorated portion of the year meaning that the exemption will be in place for 5 months of the year of the sale.
Buyer 2 purchases an existing home as their primary residence that currently does have the exemption on July 25th and applies for the exemption on August 1. The exemption that was in place and the new exemption would cover the entire calendar year.
Buyer 3 purchases a new home as their primary residence that is currently taxed based on the value of the lot on July 25th and apply for the homeowner’s exemption on August 1st. The exemption would go into effect upon assessment of the occupancy tax from date of application through the remainder of the year.
The big take away with this change is that it will in all cases be more important than ever to apply for the exemption as soon as possible after closing. The good news is that for someone buying a home that did not have it they will be able to use a tax billing amount inclusive of the exemption for loan qualifi­cation purposes instead of the higher nonexempt amount. However, if anyone forgets to ­le the application for a couple of months after closing even if the property had the exemption, may lose it until the application is processed.
The Consumer Financial Protection Bureau (CFPB) announced that it plans to change the qualified mortgage loan definition, but as it goes through that process, the current GSE Patch will remain in place. The bureau said the move will ensure that “responsible, affordable mortgage credit remains available to consumers” who could be affected by the patch’s expiration.
A group of leading industry trade associations wrote to Nebraska Sen. Deb Fischer (R-Neb.) recently to express their support for her recently introduced bill to turn the leadership of the Consumer Financial Protection Bureau into a multi-member commission. The move comes as the Supreme Court nears the end of its term, with a pending case which could decide the constitutionality of the bureau’s single-director structure.

Suspends all foreclosure and evictions for the next 60 days

On January 17, CFPB Director Kathy Kraninger provided a letter to senior Members of Congress regarding the Bureau’s plans for a revised Qualified Mortgage standard. The Bureau is currently in the middle of a rulemaking process to address the QM standard, as the “GSE Patch” is scheduled to expire in January 2021. In Kraninger’s letter, she notes that “the Bureau has decided to propose an amendment…[to] move away from DTI and instead include an alternative, such as a pricing threshold…” Kraninger also indicates that the Bureau expects to extend the GSE Patch for “a short period” to facilitate the implementation of the QM changes. Finally, Kraninger states that the Bureau is also exploring a new seasoning approach to grant QM safe harbor to loans for which “the borrower has consistently made timely payments for a period.”
  • Why it matters: The QM standard influences lending decisions by all types of originators throughout the country. Approximately one-sixth of all single-family loans achieve QM status by virtue of the GSE Patch. Expiration of the GSE Patch without corresponding reforms could drive up borrowing costs for many consumers – potentially putting home ownership out of reach for many and disrupting the mortgage market.
  • The QM revisions described in the letter are consistent with detailed recommendations recently made by MBA. In particular, MBA urged the Bureau to eliminate the use of DTI ratios as a standalone threshold in the QM definition, which would also remove the need to use the rigid, outdated Appendix Q methodology for calculating borrower income and debt.
  • Kraninger notes that the Bureau expects to issue a formal proposal no later than May 2020.