The “qualified mortgage” rule is back on everyone’s minds following the Consumer Financial Protection Bureau’s request for information in 2017 and a subsequent assessment of the rule published this.
Among the rules that CFPB has determined to fit that category are the Ability-to-Repay/Qualified Mortgage (ATR/QM) Rule and the real estate settlement procedures Act (RESPA) Mortgage Servicing Rule..
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· The CFPB and the Qualified Mortgage – The QM Trap. The new lending requirements were known as the Qualified Residential Mortgage (QRM). The QRM loan had more strenuous guidelines that other loans. These included: No greater than an 80% loan to value for purchases, 75% for refinances, and 70% for cash out refinances.
· The Bureau of Consumer Financial Protection (Bureau) is amending Regulation Z, which implements the Truth in Lending Act (TILA). Regulation Z currently prohibits a creditor from making a higher-priced mortgage loan without regard to the consumer’s ability to repay the loan.
Earlier this year, the Consumer Financial Protection Bureau (CFPB) issued a number of mortgage-related rules, including its long-awaited qualified mortgage (QM) rules in an 804-page set of complex guidelines for residential real estate lending mandated by the Dodd-Frank Act. The rules take effect in January 2014.
To be sure, the regulatory environment has made aspects of mortgage origination more challenging, and the industry continues to push for changes to the CFPB’s "Qualified Mortgage" rule and other.
Non-qualified mortgage loans are home loans that do not fall within the CFPB’s definition of a qualified mortgage rule. They don’t conform to QM underwriting mandate. For additional information on how to qualify, call us at (866) 772-3802 or use the tools on this website.
Qualified Mortgages have three types of requirements: restrictions on loan features, points and fees, and underwriting. One of the underwriting requirements under the general definition for Qualified Mortgages is that the borrower’s total debt- to-income ratio is not higher than 43 percent.
NAMB also believes the CFPB should re-examine the rationale for the three percent cap on points and fees for Qualified Mortgages and either increase that amount, remove items that are double counted,
If your credit union makes closed-end consumer loans secured by a dwelling, you must comply with CFPB's Ability-to-Repay/Qualified Mortgage (ATR/QM) Rule.