W. Va. Code R. § 106-5-11

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 106-5-11 - Documentation of Ability to Repay

11.1. No lender should make a loan unless the lender reasonably believes at the time the loan is closed that the borrower(s) will be able to make the scheduled payments to repay the loan. This reasonable belief must be based upon a consideration of the income of the borrower(s), current debt, employment status and history, and other financial resources other than equity in the dwelling that will secure the loan.

11.2. If a borrower's household debt-to-income ratio will exceed fifty percent upon the extension of new residential mortgage loan as determined from a credit report, credit application, financial statement, then the broker and initial lender must document, in writing and maintain in accordance with the provisions of subsections 3.1.ff. or 6.1.z. of this rule, an assessment of the borrower's ability to repay the loan according to its terms. Such assessment must be signed by the lender or the lender's representative and the borrower(s) and must consider the household's current debt obligations, the term of the loan, and the borrower(s) circumstances along with their current and projected income and assets, other than a security interest in the real estate taken to secure the loan.

11.3. The requirement of subsection (2) of this section shall not apply if the loan obtained qualifies under guidelines established by the West Virginia Housing Development Fund, the Veterans Administration or a non-profit housing provider licensed under W. Va. Code § 31-17-1, et seq.

W. Va. Code R. § 106-5-11