In 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
- Jan 3 - Fact Sheet: CFPB Regulations Establish a Broad Qualified Mortgage Definition
- Jan 3 - Fact Sheet: Qualified Mortgage Rule Benefits the Housing Market (Comments by Mortgage Industry Organizations and Experts, Community Advocates, and Lawmakers)
- Jan 2 - Commentary: CFPB: Regulation done right
- Oct 31 - Comment Letter: CRL to Regulators: Align Qualified Mortgage (QM) and Qualified Residential Mortgage (QRM) Rules
- Jun 18 - Testimony: Dodd-Frank Act Balances Access to Credit and Key Protections
- May 29 - Press Release: Final Mortgage Rules Balance Consumers', Lenders' Interests
"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
- Jan 27 - CRL's Chris Kukla Discusses New Rules on NC Policy Watch
- Jan 3 - Will It Be Easier to Get a Mortgage In 2014?
- Dec 27 - New Mortgage Rules Won't Knock Out Many Borrowers
- Dec 5 - CFPB Director Addresses QM Myths
- Oct 1 - HUD Proposes Its Own QM Definition
- Sep 17 - Consumer Watchdog Completes Work on Sweeping Mortgage Rules
- Aug 16 - CFPB Updates Exam Guide for QM, Mortgage Rules
- Jul 22 - 'Consumer Mortgage Choice Act' Takes Away Consumers' Choices
- Jun 20 - Mortgage-Rule Concerns Overblown, Cordray Says
- Apr 23 - CFPB Wants to Avoid 'Disincentives' for Lenders in Qualified Mortgage Rule
- Apr 15 - CFPB Publishes QM Compliance Guide for Small Firms