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Tuesday, February 26, 2013

ABA Comments on QM & Ability to Repay Standards

ABA submitted two comment letters to the CFPB regarding proposals to expand certain definitions of qualified mortgages (QM) and certain exemptions from the ability to repay (ATR) standards.

In the first letter, ABA expressed general support for the CFPB’s proposals, writing that the final ability to repay rule “sets a reasonable framework for determining a borrower’s ability to repay, and establishes a QM safe harbor which will broadly serve borrowers and lenders well for most loans, ensuring that fair, reasonable and affordable credit remains available.”

In the letter ABA also applauded the CFPB for issuing a concurrent proposal “recognizing the need for exceptions to ATR and expansions of the QM safe harbor to fit the needs of…specialized communities and markets.”

The second letter focused on those portions of the proposal that deal with the calculation of points and fees under the ability to repay rule. ABA expressed support for the CFPB’s second alternative provided in the proposed rule, setting forth the standard that consumer payment of up-front fees and points must offset creditor payments to the loan originator when calculating points and fees.

Read the first of the two letters.
Read the second of the two letters.

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