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ARTICLE · 24 FEBRUARY 2021

CRS Reviews CFPB Qualified Mortgage Rule

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In a new report, the Congressional Research Service reviewed the evolution of the CFPB's Qualified Mortgage Rule and the recently amended requirements on "ability-to-repay."

United StatesFinance and Banking
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In a new report, the Congressional Research Service ("CRS") reviewed the evolution of the CFPB's Qualified Mortgage ("QM") Rule and the recently amended requirements on "ability-to-repay." (See previous coverage.)

On December 29, 2020, the CFPB issued final rules broadening the scope of the definition of QMs under Regulation Z ("Truth in Lending Act") in order to increase the likelihood that lower-income borrowers would be able to obtain mortgages by expanding the types of mortgages that government-sponsored enterprises may purchase. One of the new rules replaced the 43-percent limit on a consumer's debt-to-income ratio ("DTI") with requirements based on mortgage pricing that reflects the credit quality of borrowers. The CRS stated that this change was implemented after the CFPB found that the DTI cap restricted credit access.

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