The Consumer Financial Protection Bureau (CFPB) on Oct. 22 finalized amendments to its Ability-to-Repay (ATR) rule, which falls under the Truth in Lending Act.
Read the final rule here.
Among those amendments are changes that will help certain nonprofit organizations continue to provide mortgage credit and servicing to underserved populations, as well as a limited fix to allow lenders to adjust a loan to remain as a Qualified Mortgage (QM) when it has exceeded the points-and-fees cap.
The latter adjustment in particular drew praise from the American Bankers Association.
“The bureau made several ABA-advocated changes to the final rule,” the group said in a statement, adding that it applauded the changes.
Among the changes are an exemption for certain small servicers from some of the CFPB’s new mortgage servicing rules as long as they and their affiliates service 5,000 or fewer mortgage loans and meet other requirements. Certain 501(c)(3) organizations already were exempt from the ATR rule as long as they made no more than 200 mortgages annually, along with other requirements. That has now been adjusted to allow certain loans from nonprofits without regard to the 200-loan limit.
And finally, the points and fees change will allow lenders who have discovered that a loan exceeds the 3 percent points-and-fees cap to refund the excess amount to the consumer – with interest – within 210 days and still be counted as a QM.
The changes take effect upon publication in the Federal Register.
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