QM – Consumer Financial Services Watch

A Cure for What Ails You – Or At Least One Thing That Does: CFPB’s Cure for “Points and Fees” Mistakes

Nov 17 2014

In a recent amendment to Regulation Z, the CFPB offers a tonic to mortgage lenders and their assignees that have struggled with the “points and fees” calculation for Qualified Mortgages (QMs). The CFPB’s cure allows lenders or assignees of covered loans to reestablish the QM status of a loan for which the amount of points and fees inadvertently exceeds the thresholds set by the CFPB’s Ability to Repay/QM Rule. The cure is available for loans consummated on and after November 3, 2014, but it expires January 10, 2021.

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Federal Regulators Alleviate Fair Lending Concerns Regarding QM Origination

Oct 23 2013

By: Stephanie C. Robinson, Andrew L. Caplan

Recognizing that many creditors will be inclined to originate only “qualified mortgages” (“QM loans”) when the CFPB’s ability-to-repay rule takes effect in January, five federal regulators yesterday announced that a creditor’s decision to offer only QM loans will not elevate the creditor’s fair lending risk, absent other factors. Read More

Fannie Mae and Freddie Mac to Restrict Purchases to Qualified Mortgages – The Future for Non-QM Loans Remains Unclear

Jun 11 2013

By: Kristie D. Kully , Andrew L. Caplan

On May 6, 2013, the FHFA, the regulator (and conservator) of Fannie Mae and Freddie Mac (the “GSEs”), directed the GSEs to limit their mortgage acquisitions to Qualified Mortgages (or loans that are otherwise exempt from the CFPB’s Ability to Repay Rule), effective January 10, 2014. This FHFA Directive (the “Directive”) will ensure that the GSEs only purchase loans that are fully amortizing, have a term of 30 years or less, and have points and fees limited to 3% of the total loan amount (and meet all the other QM criteria). Read More

CFPB Addresses Double-Counting of Loan Originator Compensation in Points and Fees

Jun 04 2013

By: Kristie D. Kully , Anaxet Y. Jones

Earlier this week, the Consumer Financial Protection Bureau (“CFPB”) issued a final rule (the “Final Rule”) that attempts to fix the double-counting problem when including loan originator compensation in the points and fees calculation for Qualified Mortgages (“QMs”) and high-cost loans under Section 1026.32 (“HOEPA Loans”). Read More

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