Tabs

Bank/Thrift Supervision   |    Capital    |    CFPB    |    Deposit Insurance    |    Interchange    |    Mortgage Finance
Municipal Advisors   |    OCC-OTS Merger   |    Preemption    |    QM - QRM    |    Swaps   |    Volcker Rule    |    Full Topics List
 
Qualified Mortgage - Qualified Residential Mortgage
Swaps
Consumer Financial Protection Bureau - CFPB
Bank/Thrift Holding Company Supervision
Capital
Deposit Insurance
Interchange
Mortgage Finance
Municipal Advisors
OCC-OTS Merger
Preemption
Volcker Rule
Corporate Governance
Financial Stability Oversight Council (FSOC)
Appraisals
Office of Financial Research (OFR)
Systemic Risk
Supervision and Oversight
Payment, Clearing and Settlement
Prudential Supervision
Trust & Securities
Asset-Backed Securities
Resolution Authority

Monday, June 9, 2014

ABA Praises CFPB Mortgage Cure Proposal, Seeks Longer Window

The CFPB’s proposal last month to introduce a limited “cure” provision to the Qualified Mortgage rule would “significantly improve” the rule, ABA said in a comment letter. It would help banks ensure compliance, manage liability, and thus offer consumers lower-cost loans, ABA added, “incentiviz[ing] robust post-consummation quality control and audit procedures in a way that benefits both lenders and borrowers.”

The CFPB’s proposal would allow a lender who intends to originate a QM but that later finds that points and fees exceeded the 3% cap to refund the excess within 120 days and maintain the legal protections afforded to QMs.

ABA urged the bureau to extend the time during which banks can cure errors to 180 days, as 120 days would be too tight a timeframe for banks — especially small community lenders — to review consummated mortgages without dramatically increasing their compliance costs. ABA also urged the bureau to eliminate the good-faith requirement, which it said is duplicative.

The bureau is also seeking comment on whether and how to provide an opportunity to cure or correct consummated loans that were originated as QMs in good faith but ended up exceeding QM’s 43% debt-to-income ratio limit, and ABA intends to comment on this matter by July 9.

Read the letter.

No comments:

Post a Comment

Please read our comment policy before making a comment.