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Washington
Ability-to-repay mortgage rules delayed by CFPB
WASHINGTON (6/1/12)--The Consumer Financial Protection Bureau (CFPB) has delayed the release of a final version of its ability-to-repay mortgage rule until later this year, and is asking for public comment on new data that could change how the agency designs the final rule.

Under the still developing rule, mortgage originators would be required to consider a homebuyers ability to repay their loan before a loan could be offered. The ability-to-repay rule was scheduled to be released as a final version in July, alongside a number of other CFPB mortgage disclosure and rule changes.

However, the CFPB said it decided to revisit elements of its ability-to-repay rule after the Federal Housing Finance Agency provided information on the performance of loans purchased or guaranteed by Fannie Mae and Freddie Mac between 1997 and 2011. The CFPB said it has also obtained data on other securitized mortgage loans.

This mortgage information can be used for a variety of analyses, such as modeling the relationship between ability to repay and variables such as consumers' ratios of debt to income, the CFPB said.

CFPB Director Richard Cordray in a release said the agency is "committed to gathering solid data to inform this important rule.  This notice gives the public an opportunity to comment on the information we have received so far, as well as an opportunity to submit additional data," he added.

Credit unions and other interested parties can comment on the new data and provide their own information on similar mortgage loans.

The CFPB emphasized that it is only accepting public comment on the new data, and is not accepting comment on the ability-to-repay rule itself. The agency will accept public comment until July 9.

Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said CUNA will be working with state credit union leagues, the CUNA Consumer Protection Subcommittee and the CUNA Lending Council to determine what further information could be provided to the CFPB to ensure the impact of the final rule is as minimal as possible on credit union operations.

Revised mortgage applications and mortgage loan closing documents and rules regulating mortgage origination points and fees and addressing mortgage loan originators' qualifications and compensation are being developed by the CFPB, and are set to be released this summer.
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