RSSThe Consumer Financial Protection Bureau is re-opening the comment period on a proposed rule that addresses new ability-to-repay requirements for mortgages, as well as the definition of “qualified mortgage.”
In May 2011 the Federal Reserve Board sought comments on this proposed rule, which amends Regulation Z (Truth in Lending) to implement amendments to the Truth in Lending Act (TILA).
Since then, the CFPB has inherited implementation authority for the rule, often referred to as “Ability-to-Repay” or “QM.”
In the rulemaking process, the CFPB will review data from the Federal Housing Finance Agency (FHFA), which tracks the performance of loans purchased or guaranteed by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) from 1997 to 2011. The CFPB has also obtained data on other securitized mortgage loans.
The data can be used for a variety of analyses, such as modeling the relationship between ability to repay and variables such as consumers’ ratios of debt to income. Some have urged the CFPB to adopt a debt-to-income threshold when defining “qualified mortgages,” according to a Bureau press release.
Bankers and others are encouraged to comment on Ability-to-Repay by July 9, 2012.
The Dodd-Frank Act requires the rule to be finalized by January 2013.
