The CFPB has issued its long-awaited and much-discussed ability-to-repay final rule, and the initial review of the 800-plus page document is that the bureau generally succeeded in navigating a moderate course, giving lender groups and consumer groups some but not all of what each wanted. In short, the rule creates a general definition of a qualified mortgage that addresses product standards, features minimum underwriting and documentation requirements, and limits “points and fees” to 3 percent. In terms of product...

Illustrating the relative success the CFPB had in striking a middle-of-the-road tone in its ability-to-repay final rule, nearly every interested public and private constituency seemed to find some things to like and other things to be concerned about in the end product. The Mortgage Bankers Association, like many lending and real estate groups, said it was pleased the bureau provided a legal safe harbor to lenders when they originate loans that meet the QM standards in the rule. “This approach should allow lenders to...

In addition to the ability-to-repay rule itself, the CFPB has issued a proposal to seek comment on whether to adjust the final rule for certain community-based lenders, housing stabilization programs, certain refinancing programs of Fannie Mae or Freddie Mac and federal agencies, and small portfolio creditors. The bureau wants to know whether the rule should be modified to address potential adverse consequences on certain narrowly-defined categories of lending programs. Specifically, the proposal includes amendments...

The CFPB has issued a final rule that increases Home Ownership and Equity Protection Act coverage for mortgages with high interest rates, fees or prepayment penalties. The rule expands HOEPA to cover home]purchase loans and home equity lines of credit; revises the lawfs rate and fee thresholds for coverage; and adds a new coverage test based on a transactionfs prepayment penalties. The final rule implements the Dodd-Frank Actfs revisions to HOEPAfs coverage tests by providing that a transaction is a high-cost mortgage if any...

The CFPB issued a final rule it inherited from the Federal Reserve that generally extends the current required duration of an escrow account on certain higher-priced mortgage loans from a minimum of one year to a minimum of five years. To preserve access to credit, the rule creates an exemption from the escrow requirement for small creditors that operate predominately in rural or underserved areas.Specifically, to be eligible for the exemption, a creditor must:make more than half of its first-lien mortgages in rural or...

It looks like all of the clamoring that mortgage lenders have engaged in over the last year about the volume and expanse of new regulations has earned them a bit of a reprieve on at least one front. The CFPB now expects to issue its final rule on the combined and integrated Truth in Lending Act and Real Estate Settlement Procedures Act consumer mortgage disclosures in September, according to the bureau’s semiannual regulatory agenda released last week and in commentary included in its final rule on escrow accounts for...

Mortgage banking entities and credit unions are trying to prepare as best they can for an anticipated onslaught of new regulations from the CFPB that will likely dramatically reshape the landscape of mortgage lending for years and perhaps generations to come. Part of their coping strategy is to enlist the aid of bureau officials themselves to help measure out all the new rules into more digestible portions. The Mortgage Bankers Association, for one, recently wrote the CFPB, suggesting the agency use a staged...

Banks and credit unions generally are fully behind the CFPBfs ability-to-repay credit card proposal that is expected to make it easier for stay-at-home spouses to qualify for such forms of credit. The Truth in Lending Act and its implementing Regulation Z generally prohibit a card issuer from opening a credit card account for a consumer, or increasing the credit limit applicable to a credit card account, unless the card issuer considers the consumerfs ability to make the required payments under the terms of such account...

The CFPB has apparently launched investigations into some of the mortgage lending entities that it had warned last year about their advertising practices, according to a leading industry attorney following such developments. If the bureau has in fact initiated such probes, it “underscores the importance for companies who receive warning letters from the bureau to promptly address issues raised by the bureau,” according to Alan Kaplinsky, a practice leader with the Ballard Spahr law firm. Further, “If these...

The CFPB is apparently under such time constraints to promulgate its various rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act, it can no longer wait to publish them in the Federal Register. A recent final rule from the bureau says its final rules will now be considered “issued” on the earlier of the rules’ posting on the agency’s website or publication in the Federal Register. The CFPB says the definition of when a rule is issued has legal consequences, and the bureau generally intends to issue rules by...