Making Appendix Q Work for You


Presented by: Mary Beth Guard and John Burnett

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What's the big deal about Appendix Q? It's been an almost constant topic of conversation since the Bureau published the 2013 Ability-to-Repay rule, in spite of the fact that it's really no more than a tool to be used in determining monthly debt-to-income ratios for mortgage loan applicants. The challenge, of course, is that creditors need to understand the tool and use it correctly, or the end product may not be suitable. You can't calculate DTI correctly (and stay under the 43% cap, where required) if you don't know what Q says about the components that go into the math. And when the product to be created is a Qualified Mortgage (QM) under the Ability-to-Repay rules, the consequences of a faulty product can be costly.

In this presentation, you'll receive information that you can use to ensure that your institution understands the Appendix Q underwriting tool and its place in your residential mortgage lending toolbox. During the webinar we'll cover the following topics, and more:

  • A quick look at when the use of Appendix Q is actually required
  • A rundown of situations in which Appendix Q isn't essential, but may be useful
  • The purpose of the Appendix
  • Related resources form HUD, VA and others
  • Factors to use when considering employment income
  • Evaluating salary, wages and other forms of income
  • Special considerations relating to employment in a family business
  • Considering self-employment income
  • Using individual tax returns for verification
  • Evaluating corporate, "S Corp" and partnership tax returns
  • Evaluating non-employment related income
    • Alimony, child support and separate maintenance
    • Investment and dividend income
  • Looking at military, government agency or assistance program income
  • Income from rental property
  • "Grossing up" untaxed income
  • Treatment of recurring obligations
  • Considering contingent liabilities
  • Key considerations for projected obligations
  • Obligations you don't need to count
Understanding which income and obligations need to be included and how they must be factored into the monthly debt-to-income ratio when making loans for which the use of Appendix Q is required is essential. Omitting significant obligations or overcounting income items can lead to assigning a ratio that appears to meet the criteria for such loans, a decision that can prove costly months or years in the future if a borrower has problems meeting monthly payments, and can invite examiner criticism or regulatory enforcement action.

We'll lead you through it step by step.

About the Speakers: Mary Beth Guard currently serves as Executive Editor of, CEO of Glia Group, Inc. and Executive Editor of Since graduating from law school in 1980, Mary Beth has focused her work almost exclusively on the banking industry. Previously, Mary Beth served as EVP/General Counsel and COO for the Oklahoma Bankers Association, EVP of Specialized Services for Thomson Financial Publishing, and General Counsel for the Oklahoma State Banking Department. Mary Beth is on the advisory board for Bankers' Hotline. She has presented training programs for virtually every major national financial industry association, as well as more than a dozen state bankers associations and a host of other organizations. In addition, Mary Beth has written more than a thousand banking-related articles and is a BOL Guru.

John Burnett is a 1979 alumnus of the ABA National Compliance School, and served on its faculty for several years. He graduated with honors with the Class of 1990 from ABA's Stonier Graduate School of Banking. He is also a graduate of the BAI's and the Massachusetts Banker Association's School of Banking.

He joined Cape Cod Bank and Trust Company in 1971 and assumed his role as Compliance Officer in 1976. He also served as corporate secretary and secretary of CCBT's Board of Directors, as well as Clerk of the bank's holding company. John joined Glia Group, Inc., and became a part of the BOL Team in June, 2004.

Mr. Burnett is a former member chair of the Massachusetts Bankers Association Legal and Regulatory Compliance Committee, and of the American Bankers Association Compliance Executive Committee and NCS/NGCS Advisory Board. He served on ABA's Truth in Savings Task Force, and has served on several ABA and Massachusetts Bankers seminar panels.

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  • Complete presentation (including slides and audio)
  • Written Materials
  • Follow-up Q & A
You have the right under this license agreement for this CD-ROM to use this presentation on a single-workstation. Use on a network is in violation of the copyright agreements. CD may be used by multiple users at a given institution but may not be placed on a network or in any other multi-user environment.

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  • Model: cd_appendixq1213
  • Manufactured by: Glia Group, Inc.

This product was added to our catalog on Friday 04 October, 2013.

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