On January 10, 2013, the Consumer Financial Protection Bureau (CFPB) released its final “Ability-to-Repay/Qualified Mortgage” rules. The rules and the concurrent proposed amendments were posted on the CFPB’s website following published remarks by Director Richard Cordray and a two-hour “field hearing” in Baltimore, MD. The bureau also promised to publish plain-language booklets and educational videos to help guide lenders through the maze of new rules.
The rules, which are over 800 pages long, are “final” in the sense that they have been revised from the proposed rules that were released for comment last summer, and they are now “official.” However, the rules do not take effect for another year (January 10, 2014), and the bureau issued an additional 184-page “concurrent proposal” containing potential amendments to the new rules that address and/or clarify unresolved issues such as exemptions for certain nonprofit creditors and homeownership stabilization programs, an additional definition of a qualified mortgage for certain loans made and held in portfolio by small creditors such as community banks and credit unions, and inclusion of loan originator compensation in the points and fees calculation. Notwithstanding the pending amendments and delayed effective date, the rules issued last week will have an enormous impact on the mortgage lending business, and their complexity makes prompt commencement of implementation work essential.