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Wednesday, January 8, 2014

CFPB Director Cordray Speech: National Association of Realtors

In his prepared remarks to the National Association of Realtors, CFPB Director Richard Cordray described the implementation of the bureau’s new mortgage rules that take effect on January 10. Cordray briefly reviewed the reasons behind and implementation of the Loan Originator Compensation rule, which is meant to prevent yield spread premiums. He also discussed the Ability-to-Repay rule (QM rule), under which lenders must look more thoroughly at the borrower’s ability to repay the loan. Regarding some “myths” about the rule, Cordray said:

“The rule does not mean consumers, realtors, and lenders will have to jump through unreasonable hoops to get a loan. The truth is that lenders likely will be asking of a potential homebuyer just what responsible lenders have been asking for all along – basic things like proof of income or assets.”

He continued to explain that the new rule does not ban other mortgage besides Qualified Mortgages and that it only applies to new mortgages that people apply for on or after January 10, 2014.

Read the speech.

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