The Independent Community Bankers of America said last week that while it supports the CPFB’s final changes to its mortgage rules, all community bank balloon-mortgage loans should be considered qualified mortgages if they are held in portfolio.
“The CFPB has taken important measures to minimize the negative impact of new mortgage regulations on borrowers and the community banks that serve them,” the ICBA said of the final rules, which are set to take effect in January. “However, additional changes to the final rules will help ensure that excessive regulatory burdens do not harm borrowers and the mortgage-lending system by driving community banks from the market.”
The CFPB said in the changes announced last week that it will exempt all small creditors, even those that do not operate in rural or underserved areas, from a ban on balloon-payment mortgage until the definitions of rural and underserved are revisited by the CFPB in the next two years.
“The bureau’s updated rules will also make it easier for certain small lenders to qualify for an exemption from a requirement to maintain escrow accounts on higher-priced mortgage loans,” the ICBA said. “However, ICBA continues to advocate that the CFPB exempt all portfolio loans from the escrow requirements for higher-priced mortgage loans because community banks retain a vested interest in the loans they hold in portfolio.”