Among the critical areas that mortgage lenders must pay close attention to in the CFPB’s ability-to-repay, qualified mortgage rule is what’s known as Appendix Q, which contains detailed underwriting guidance on how creditors must calculate the debt-to-income ratio in order to make a general QM loan subject to the 43 percent DTI limit. As adopted, Appendix Q generally requires items to be considered and verified for the two prior years, and requires well-documented projections for the following three years. However, on April 22...
The National Association of Federal Credit Unions is apprehensive about the unintended consequences of the Federal Housing Finance Agency’s decision to limit Fannie Mae and Freddie Mac future mortgage purchases to ‘qualified mortgages’ as defined by the final rule issued earlier this year by the CFPB. Earlier this month, the FHFA directed the two government-sponsored enterprises to limit their future mortgage acquisitions to loans that meet the requirements for a qualified mortgage, including those that meet the special or...
Legislation Would Revise QM Points-and-Fees Calculation Sens. Joe Manchin, D-WV, and Mike Johanns, R-NE, introduced legislation last week that would amend the way ‘points and fees’ are calculated to determine if a loan meets the ‘qualified mortgage’ definition under the CFPB’s ability-to-repay rule, issued earlier this year. Under the rule, a QM cannot have points and fees exceeding three percent of the loan amount. S. 949 is a companion to H.R. 1077, the Consumer Mortgage Choice Act, which has steadily picked up support since...
The broad and still uncertain powers granted to the CFPB by the Dodd-Frank Wall Street Reform and Consumer Protection Act are the biggest threat to community banks, according to an American Enterprise Institute white paper authored by Tanya Marsh and Joseph Norman.“The CFPB has been granted broad powers to ‘regulate the offering and provision of consumer financial products or services,’” the authors said. “The limit to those powers, and how those powers may be implemented in regards to community banks, remain uncertain...
In its yearly letter to the CFPB, the Federal Trade Commission affirmed that it is “committed to continuing its vigorous enforcement” of regulations under the Equal Credit Opportunity Act, the Electronic Fund Transfer Acts, the Truth in Lending Act and the Consumer Leasing Act, and “in intends to do the same with other rules the CFPB issues.” The Dodd-Frank Wall Street Reform and Consumer Protection Act gave the FTC the authority to enforce any bureau rules that apply to entities within the FTC’s jurisdiction, which...
It’s not exactly Mutiny on the Bounty, but 378 employees of the CFPB voted last week in favor of joining the National Treasury Employees Union, with 86 against, putting the NTEU in the position of representing more than 800 of the CFPB’s approximately 1,200 employees, according to Politico. “Why would employees at CFPB – an agency with liberal bona fides, generous compensation and top-notch benefits – want to form a union,” Politico asked. “The push to organize was driven in large part by news that many employees in...
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