Complying With The CFPB’s Qualified Mortgage Rule: Issues For Implementation

On January 30, 2013, the Consumer Financial Protection Bureau (“CFPB”) published its final rule, pursuant to Sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“DFA”), amending Regulation Z to require mortgage lenders to take into account a borrower’s ability-to-repay when making a mortgage loan (the “Final Rule”).¹ The Final Rule also defines “qualified mortgages” (“QMs”), which are presumed to satisfy the ability-to-repay requirement, providing a legal safe harbor for certain QMs, and a rebuttable presumption of compliance for others. In addition, the Final Rule provides for certain exceptions from the QM definition. The Final Rule is scheduled to become effective January 10, 2014. The CFPB also concurrently published a proposal for certain amendments to the Final Rule, including whether or not to include specific types of government-assisted mortgages as QMs, and clarifications about loan originator compensation.