Alert June 12, 2012

CFPB Reopens Comment Period on Qualified Mortgage/Ability-to-Pay Rule

The CFPB reopened the comment period on its proposed rule to impose new ability-to-pay requirements and a definition of “qualified mortgage.” The original comment period ended in July 2011. The reopening of the comment period was spurred by new data from the Federal Housing and Finance Agency, which the CFPB believes may be helpful in determining what loan characteristics should be used to define a “qualified mortgage.” The comment period was also opened to allow commenters to provide any available data on the relationship between debt-to-income ratios, among other factors, and delinquencies, which, again, could influence what types of mortgages are considered “qualified.” The CFPB seeks comment and data on six specific areas: (1) the FHFA dataset; (2) data for loans not covered by the FHFA data (i.e., FHA loans or VA loans); (3) any measures of loan performance and their relationship to a consumer’s debt-to-income ratio; (4) any measures of residual income; (5) any measures of the amount of liquid financial reserves available to meet mortgage-related obligations or current obligations; and (6) any measures of stable income and timely housing payments. The comment period ends July 9, 2012. Click here for the press release and here for the related notice.