Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
CFPB Encourages CUs To Write Non-QM Mortgages
WASHINGTON (5/16/13)--Credit unions should continue to feel free to write non-qualified mortgage loans, as long as those loans are supported by strong underwriting, Consumer Financial Protection Bureau Director Richard Cordray said this week.

Cordray made his remarks before a National Association of Realtors gathering. In his remarks, Cordray said "lenders that have long upheld strong underwriting standards have little to fear" from the CFPB's ability to repay regulations.

The CFPB issued standards to define a "qualified mortgage" under the agency's "ability to repay" rules in January. The rule amended Regulation Z, which implements the Truth in Lending Act, to require creditors to make a reasonable, good faith determination of a consumer's ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan). It also establishes certain protections from liability under this requirement for "qualified mortgages."

"These qualified mortgages cover the vast majority of loans made in today's market, but they are by no means all of the mortgage market. This point is quite important, and it should not be misunderstood," Cordray said this week.

Credit unions and other community financial institutions "have seen the strong performance of their loans over time," he added. "Nothing about the traditional lending model has changed, and they should continue to offer such mortgages to borrowers whom they evaluate as posing reasonable credit risk--whether or not they meet the criteria to be classified as qualified mortgages. We all benefit by recognizing and sustaining responsible lending wherever we find it in the mortgage market," Cordray said.

For the CFPB Director's full remarks, use the resource link.
Other Resources

Cordray Remarks
RSS print
News Now LiveWire
#FreeGasFriday courtesy of @tvfcu, TN #creditunions http://t.co/wDRFYJVlpz
1 hours ago
If you were unable to watch or attend @cuna 's @thehill Hill forum on Wed., you can now watch the archived version: http://t.co/FhUnp7HbU8
2 hours ago
Time is running out. If you haven't taken the #NewsNow readership survey, please click here now: http://t.co/4Gp6C2Wa4o
2 hours ago
African financial inclusion possible with mobile money: @IMFNews study http://t.co/0V5DTQToxY
3 hours ago
Louise Herring's birthday is Saturday. 105 years later, her legacy lives on through her kids http://t.co/oMqGADmo0d http://t.co/T3NmS9NqEY
4 hours ago