CFPB Makes Final Modifications To Mortgage Rules

On October 22, 2014 the Consumer Financial Protection Bureau (CFPB) issued minor changes to the mortgage rules to "ensure access to credit."¹ The announcement finalized adjustments proposed in April 2014. The amendment made the following three general changes to the mortgage rules: (i) established an alternative definition of "small servicer" for certain nonprofit entities; (ii) amended the existing exemptions to the ability-to-repay rule for certain nonprofit entities; and (iii) provided for an ability to cure non-compliance with the points and fees limits that apply to qualified mortgages.

The first two amendments focus primarily on the applicability of the mortgage rules to 501(c)(3) nonprofit organizations. The current small servicer exemption to the mortgage rules defines small servicers as those entities that service 5,000 or fewer mortgage loans for which the servicer or its affiliate is the creditor or assignee.² The CFPB amended that definition to allow