Consumer Financial Protection Bureau (CFPB) Director Richard Cordray wrapped up work Friday on sweeping mortgage rules designed to ensure that borrowers can repay their loans. The CFPB said that it has finished making suggested changes to its qualified mortgage (QM) rules, which provide specific guidelines for lenders and borrowers, with the aim of smoothing the implementation process. The mortgage industry has been generally supportive of the new rules first unveiled in January, although credit unions have pushed for an exemption, arguing that their practices didn't contribute to the housing crash and subsequent financial meltdown five years ago.
Under the final rule, servicers will be allowed to send certain delinquency notices, especially those required under state law, during the first 120 days a borrower is delinquent. The modifications also make it easier for servicers to offer short-term forbearance plans for delinquent borrowers who need temporary relief, including a six-month forbearance option. For retailers of manufactured homes and their employees, the revisions clarify what compensation must be counted toward certain thresholds for points and fees under the QM and high-cost mortgage rules. The revisions also clarify when employees of manufactured housing retailers may be considered loan originators.