WASHINGTON (3/5/13)--The U.S. Department of Housing and Urban Development (HUD) is reportedly reviewing recently released qualified mortgage (QM) rules, and may publish a QM rule of its own.
Credit Union National Association Associate General Counsel Jared Ihrig noted that the Dodd-Frank Wall Street Reform Act gave HUD, the Federal Housing Administration and other agencies the authority to review QM rules released by the Consumer Financial Protection Bureau. They may also issue their own rules if necessary, he added.
Ihrig said any HUD proposal will likely impact credit unions that make FHA loans, and noted that CUNA will watch for future regulatory action in this area.
The CFPB's ability-to-repay rule, with its associated QM definition, were ordered by the Dodd-Frank Act and are intended to curb abusive lending practices, like those that lead to the nation's housing market crash, and to allow responsible lending practices to "flourish." Under the ability-to-repay/QM rule, mortgage loans that meet the criteria for a QM will be afforded a higher degree of legal protection than other mortgages, should a lender be sued by a consumer for noncompliance with the ability-to-repay provisions.