family buying a homeIn 2014, new mortgage lending reforms go into effect. Finalized by the Consumer Financial Protection Bureau, the reforms respond to the abusive lending practices that triggered the nation's financial crisis. The new rules also protect and preserve access to credit.

Lenders must now consider whether a borrower has the ability to repay a mortgage. This change means an end to "no-doc" loans. Lenders also have incentives to originate a new category of loans called Qualified Mortgages. These "QM loans" restrict risky product features like excessive fees and teaser rates. Other reforms include new servicing standards, appraisal, escrow and loan originator compensation rules.

Predatory mortgage lending practices during the mid-2000's stripped wealth from families across the country and resulted in a staggering number of foreclosures. Over the years, CRL's research and analysis has shown the high cost of abusive lending that was designed to fail.

CRL Analysis and Commentary on QM

"In the end, our [QM] Ability-to-Repay rule is straightforward. It puts behind us once and for all the kind of irresponsible lending that disrupted the housing market and so badly damaged our economy."
-CFPB Directory Richard Cordray
Remarks to the National Association of Realtors, Jan 7, 2014

QM In the News

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