On June 17, 2022, the Consumer Financial Protection Bureau (CFPB) announced that it would re-examine a rule determining which mortgages are exempt from some litigation during foreclosures. In a blog post, the government agency said it would review its Qualified Mortgage (QM) rule. The Federal Truth In Lending Act’s rule establishes requirements that mortgages must adhere to to be protected from inappropriate underwriting counterclaims during a foreclosure. The CFPB’s action is a part of a larger assessment of regulations that, in the agency’s opinion, need more examination because they were adopted from other agencies, issued within the agency’s first ten years of operation, or have undergone extensive market testing.
The amended rule substituted price-based standards for the old guideline’s 43% maximum debt to income ratio. According to the amended rule, a mortgage satisfies the “capacity to repay” requirement if the annual percentage rate is not much higher than the typical prime offer rate for a loan of a similar size. Furthermore, it introduced additional flexible alternatives for lenders to check the borrower’s income or assets in addition to the property’s value and debts, as well as higher pricing criteria for loans with lower sums.
The CFPB stated in its bulletin that the review is being conducted to investigate measures to encourage simplified modification and refinancing in the mortgage market. However, the CFPB stated that it would pay close attention to the “seasoning” restrictions. The “seasoning” section of the QM rule has already raised concerns from the past, as mentioned by Diane Thompson, senior advisor for markets and regulations at the CFPB. To read more about the CFPB’s attempt to modify the QM rule, click here.
https://www.housingwire.com/articles/cfpb-to-review-qm-rule/
About Note Servicing Center
Note Servicing Center provides professional, fully compliant loan servicing for private mortgage investors so they can avoid the aggravation of servicing their own loans and just relax and get paid.
Contact us today for more information.
Share This Story, Choose Your Platform!
Related Posts
Disclaimer
The information provided in this article is for general educational and informational purposes only and does not constitute legal, financial, investment, tax, or professional advice. Note Servicing Center, Inc. is a licensed loan servicer and does not provide legal counsel, investment recommendations, or financial planning services. Reading this content does not create an attorney-client, fiduciary, or advisory relationship of any kind. Nothing in this article constitutes an offer to sell, a solicitation of an offer to buy, or a recommendation regarding any security, promissory note, mortgage note, fractional interest, or other investment product. Any references to notes, yields, returns, or investment structures are illustrative and educational only. Past performance is not indicative of future results, and all investments involve risk, including the potential loss of principal. Note investing, real estate transactions, and lending activities are subject to federal, state, and local laws that vary by jurisdiction and change over time. Before making any decision based on the information in this article, you should consult with a qualified attorney, licensed financial advisor, certified public accountant, or other appropriate professional who can evaluate your specific circumstances. Some articles on this site include hypothetical stories, examples, and scenarios created to illustrate concepts and demonstrate the types of situations Note Servicing Center, Inc. handles. Any names, companies, properties, and circumstances in these examples are fictitious or have been anonymized to protect confidentiality, and any resemblance to actual persons or entities is coincidental. These examples do not describe specific clients and do not guarantee any particular outcome. Some content may be created with the assistance of generative AI tools and may contain errors or omissions. While we make reasonable efforts to ensure the accuracy of the information presented, Note Servicing Center, Inc. makes no warranties or representations regarding the completeness, accuracy, or current applicability of any content. We disclaim all liability for actions taken or not taken in reliance on this article.