On July 10, 2013, the Consumer Financial Protection Bureau (CFPB) released final rule1 that make changes to its January 2013 final mortgage rules under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). These rules, which take effect on Jan. 10, 2014, clarify the obligations of mortgage lenders under the January 2013 final rules, while assuring the continued availability of affordable mortgages for qualified consumers.
NAR’s comments on the proposed rules generally supported the goal of providing greater certainty on various requirements of the January rules and included specific comments related to the requirements implementing the Dodd-Frank Act requirements that mortgage lenders make a reasonable, good faith determination of a consumer’s ability to repay the mortgage. For mortgages qualifying for “qualified mortgage” or QM status, creditors receive certain protections from liability in connection with their ability-to-repay determinations. NAR’s comments were considered by CFPB and some of the recommendations were incorporated into the final rules.
1 References to the CFPB rule include Appendix Q, Standards for Determining Monthly Debt and Income, and related Official Interpretations.