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CFPB provides clarification on qualified mortgage rule

cfpbThe CFPB recently offered clarification on final rules on qualified mortgages and mortgage servicing set to take effect in January and issued a request for comment on the proposal.

“We at the Bureau believe that we have a responsibility not just to write a rule, but to see that it is implemented effectively,” the CFPB said regarding the Dodd-Frank rule, which was issued in January.

The rule would require creditors to “make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling and establishes certain protections from liability under [the] requirement for ‘qualified mortgages.’”

The CFPB’s changes included revising the criteria for determining whether a potential consumer’s income is enough to meet the debt-to-income ratio, confirmation that loans that meet eligibility requirements in a separate agreement between a federal agency and a creditor can be qualified mortgages, the establishment that a demand to repurchase or indemnify would not affect mortgage status, the assertion that Regulation X does not preempt mortgage servicing regulation by states and clarification of types of mortgage loans to consider in determining whether a servicer qualifies as “small.”

The CFPB has requested public comment due within 30 days of the proposal’s publication in the Federal Register.

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