Ability to Repay and Qualified Mortgage Requirements
Click here to view product matrices for each of the potential mortgage types. The matrices have been compiled by IBAT's Regulatory Compliance Manager, Kelly Goulart, to help you prepare for the upcoming January deadlines. Each matrix covers the potential civil liability risk, the mortgage requirements and prohibitions by type, and minimum underwriting criteria.
CFPB Mortgage Compliance Guides
CFPB Downloadable compliance guides: The CFPB prepared the below plain-language compliance guides to the new mortgage rules in a FAQ format with the stated purpose of making the content more accessible for industry constituents, especially smaller businesses with limited legal and compliance staff:
- TILA-RESPA Integrated Disclosure Rule Small Entity Compliance Guide (September 2014)
Ability-to-Repay - Qualified Mortgage Rule (Jan. 2014) | CFPB Video | Chart Comparing Ability-to-Repay and Qualified Mortgage Rules
Chart Comparing Ability-to-Repay and Qualified Mortgages - See more at: http://www.ibat.org/cfpb-residential-mortgage-rules#sthash.e8N86maO.dpuf
- 2013 HOEPA Rule (Jan. 2014) | CFPB Video
- 2013 Loan Originator Rule (Jan. 2014) | CFPB Video
- ECOA Valuations Rule (Jan. 2014) | CFPB Video
- HPML Appraisals Rule (Jan. 2014) | CFPB Video
- TILA Escrow Rule (Jan. 2014) | CFPB Video
- 2013 Servicing Final Rule (Jan. 2014)| CFPB Video
CFPB Mortgage Rule Clarification Series
In order to provide additional clarification on the recently issued CFPB mortgage reforms, IBAT Regulatory Compliance Manager Kelly Goulart is releasing a series of white papers addressing each change contained in the seven major mortgage lending initiatives.
The seventh and final part of the series, focused on mortgage loan originator compensation, is now online.
Previous documents in the series can be found here:
- Mortgage Loan Servicing Requirements
- Expansion of High Cost and High Fee (HOEPA) Mortgages
- Equal Credit Opportunity Act (ECOA) and Higher Priced Mortgage Loan (HPML) Rules
- Ability to Repay (ATR) and Qualified Mortgage Rules (amended version)
- Escrow requirements for HPMLs
- Regulation Z - Prohibited Acts or Practices
FAQs on Dodd-Frank Act Mortgage Rules
On February 21, 2013, IBAT General Counsel Karen Neeley presented the webinar above on the CFPB residential mortgage rules. The webinar was followed by a lively question and answer session. Ms. Neeley compiled those questions and answers, plus others, into an FAQ on the CFPB’s Residential Mortgage Rules that IBAT is making available to its members.
CFPB Designates "Rural and Underserved" Counties
On June 1, 2013, the Escrow Rules in Reg. Z go into effect for HPMLs. The rules exempt HPMLs made by small creditors operating in predominately rural or underserved counties. Rural counties are defined by the USDA Economic Research Service's urban influence codes (UICs), and underserved counties are defined by reference to data collected under HMDA. The CFPB has published a preliminary list of those counties in three formats: CSV, XLS, or PDF. IBAT's online Texas map of rural and underserved counties has been updated based on the CFPB list.
According to the Census Bureau’s 2000 Census reporting of the urban and rural population of Texas, CFPB’s exemption captures only 2,037,645 Texans or 53% of Texas’ rural population of 3,647,539.[i] Although well meaning and broader than the Fed’s 2011 proposal, the methodology does not delineate between rural and urban residents and will have a devastating effect on mortgage lending in rural Texas (and likely much of the U.S.), which the exemption was designed to avoid.
IBAT General Counsel Shannon Phillips has prepared a full memo on this issue, outlining IBAT’s concerns with the CFPB’s methodology of using “rural and underserved” to determine escrow requirements for mortgage lenders.
CFPB Mortgage Reform Exemption Analysis
It is certain that the new mortgage lending compliance requirements issued by the CFPB will have a considerable impact upon community banks across Texas. Of the seven major mortgage lending compliance initiatives required under Dodd-Frank, six have been finalized. Three of the four have an exemption either finalized or proposed targeting small, rural lenders. This single page handout is intended to help you understand the practical considerations of the exemption qualifications in general and what specifically is being exempted.
Regulators Offer Help with Mortgage-related Final Rules
The CFPB published a Small Entity Compliance Guide for the Ability-to-Repay and Qualified Mortgage Rule to provide a rule summary in a plain language and FAQ format. The CFPB also issued a chart comparing Ability-to-Repay with Qualified Mortgages.
- TILA-RESPA Integrated Disclosure Calendar
- Mortgage Rules Readiness Guide
- Ability-to-Repay Product Matrices
- CFPB Mortgage Rules Webinar Slides
- Dodd-Frank Act Mortgage Rules FAQs
- Texas Rural Counties Map
- CFPB Mortgage Reform Exemption Analysis
- CFPB Rural Exemption Memo
- Ability to Repay Summary
- Ability to Repay Fact Sheet
- CFPB Ability-to-Repay and Qualified Mortgage Rule
- Chart Comparing Ability-to-Repay and Qualified Mortgages