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Bureau proposes mortgage rule tweaks

The Consumer Financial Protection Bureau has announced proposed adjustments to its mortgage rules to ensure access to credit. The proposal [85 page PDF] includes two changes that would help certain nonprofit organizations continue to provide mortgage credit and servicing to underserved populations. The proposal also lays out limited circumstances where lenders that exceed the points and fees cap can refund the excess amount to consumers and still have the loan be considered a Qualified Mortgage. The proposal would—

  • Add an alternative definition of a small servicer that would apply to certain 501(c)(3) nonprofit organizations so that they can continue to consolidate their servicing activities while maintaining their exemption from some of the servicing rules
  • Amend the ability-to-repay exemption in § 1026.43(a)(3)(v)(D) to allow certain 501(c)(3) nonprofit groups to continue to extend interest-free, forgivable loans ("soft seconds") without regard to the 200-loan limit
  • Add new paragraph 1026.43(e)(3)(iii) to provide a limited 120-day post-consummation opportunity for lenders to refund excess points and fees in order to meet Qualified Mortgage requirements, subject to certain policy and procedures requirements

Comments will be accepted for thirty days following publication in the Federal Register.

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