CFPB's 'Minor' Changes to Mortgage Rules May Have Major Impact

May 1, 2014
American Banker 
mortgage lending news
The Consumer Financial Protection Bureau (CFPB) confirmed that it is tweaking its home lending rules so that more loans meet the definition of "qualified mortgage."

Many of the proposed amendments to the rules, which took effect at the start of the year, benefit nonprofit lenders. For example, the agency intends to let more nonprofits write QM loans while giving them shelter from mortgage servicing rules. It also may adjust its ability-to-repay rule so that Habitat for Humanity and other big nonprofits can continue to provide interest-free, forgivable loans even if they do not satisfy the current exemption threshold of fewer than 200 mortgages annually.

One of the biggest changes, which could affect lenders across the board, involves the limit on points and caps under the QM standards. The CFPB may revise the rule so that if a lender miscalculates costs and later realizes that the points and fees topped 3 percent, it can retain QM status on the loan as long as the borrower is refunded within a certain period of time.

"Our mortgage rules are now helping to protect consumers all across the country from debt traps, runarounds, and surprises," said CFPB director Richard Cordray. "Today's proposal would maintain those strong protections, while making minor changes to ensure consumers have access to credit. This includes helping nonprofits that provide working families with important pathways to affordable homeownership."

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