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Proposed Amendments to the 2013 Mortgage Rules Under the Truth in Lending Act and the Real Estate Settlement Procedure Act
Dear Ms. Jackson:
The Consumer Bankers Association (CBA) appreciates the opportunity to submit comments in response to the proposed clarifications to the mortgage rules that were issued in January of this year. These clarifications address certain issues arising under the Ability to Repay (ATR)/Qualified Mortgage (QM) Rule and the Servicing Rule.
Specifically, these proposed changes and clarifications address: (1) the determination of the QM status of a mortgage loan when it is purchased, guaranteed or insured by Government-sponsored enterprises (GSEs) or Federal agencies; (2) the calculation of a borrower’s debt-to-income ratio (“DTI”) under Appendix Q of the ATR/QM Rule; (3) the Regulation X preemption of State law as it pertains to mortgage servicing; and (4) the scope and application of the small servicer exemption under the Regulation X Servicing Rule.
Summary of CBA’s Comments
- For QM eligibility under the temporary GSE exemption, we appreciate the proposed clarifications indicate eligibility does not depend on compliance with GSE requirements that are unrelated to underwriting. However, more clarification is needed as to the distinction between underwriting and non-underwriting criteria.
- For the permitted variances for the GSE exemption, the proposal clarifies a servicer may rely upon any written agreement between the creditor and GSE modifying the standards for purchase, guarantee, or insurance for purposes of determining whether a loan constitutes a QM. CBA requests the CFPB clarify that assignees would be entitled to rely on these variances.
To read the full Comment Letter, download the PDF.