Mortgage industry groups sent a letter to the CFPB urging it to broadly define "Qualified Mortgage" in its forthcoming Ability to Repay regulation. Section 1411 of the Dodd-Frank Act amends the Truth in Lending Act to require creditors making residential mortgage loans to determine whether the borrower is reasonably able to repay the loan. Under Section 1412 of Dodd-Frank, a borrower receiving a qualified mortgage will be presumed to be able to repay the loan. In the letter, the industry groups argued that a broad definition would aid in the housing market recovery, by increasing the pool of qualified borrowers, and also reduce costs to borrowers who otherwise might be burdened with the costs of riskier non-qualified mortgage loans. Click here for the letter.
Alert April 17, 2012