SAN FRANCISCO, Jan. 6, 2014 /PRNewswire/ -- In support of its customers' homeownership goals, Bank of the West announced today that it will continue to offer interest-only mortgages after the new Qualified Mortgage (QM) rule takes effect on January 10, 2014. The new rule is part of the Dodd-Frank Act and was promulgated by the Consumer Financial Protection Bureau (CFPB).
"We extensively reviewed the CFPB's rules and found them broadly consistent with how Bank of the West has always done business. At the same time, we know that interest-only loans can fulfill the mortgage needs of many of our customers. Therefore, even though they do not fit the CFPB's definition of a QM, we will continue to offer them as before," said Paul Wible, Senior Executive Vice President and Head of the bank's National Finance Group.
He continued, "Our analysis confirmed what we believed when the new rules were announced: a well-underwritten, interest-only mortgage can be a good choice for our customers and they are safe for us to hold on our balance sheet."
The bank will continue to require that borrowers seeking interest-only loans meet the bank's prudent underwriting criteria. The bank will hold the loans in its portfolio as it has done for many years. Like most banks that intend to continue to offer interest-only loans, the bank has reviewed its underwriting requirements to qualify for an interest-only loan to ensure the borrower has the ability to repay the loan once the interest-only period has expired.
"Interest-only loans meet the needs of certain customers – such as the self-employed, or those interested in cash flow. We are excited to be able to continue to meet the needs of our customers with an attractive product that we have been underwriting for many years," said Karen Mayfield, National Sales Manager for Bank of the West's Mortgage Banking Division.
About Bank of the West:
Founded in 1874, $65 billion-asset Bank of the West (www.bankofthewest.com), Member FDIC and Equal Housing Lender, offers a wide range of personal, commercial, wealth management and international banking services. The bank operates more than 600 retail and commercial banking locations in 19 Western and Midwestern states. Bank of the West is a subsidiary of BNP Paribas, which has a presence in 80 countries with nearly 200,000 employees.
SOURCE Bank of the West