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VIEWpoint Issue 1 | 2023
2023 Compliance Trends: Staying Ahead in an Evolving Regulatory E...
On Dec. 10, 2010, the Consumer Financial Protection Bureau (CFPB) issued two final rules addressing qualified mortgages (QMs). The 343-page final rule changes the existing requirements of a general QM loan. Under existing rules a consumer’s debt-to-income ratio could not exceed 43%, however, the new rule modifies this to a priced-based approach.
Pursuant to the new rule, a loan has a conclusive presumption the consumer has the ability to repay if the annual percentage rate (APR) does not exceed the average prime offer rate for a comparable transaction by 1.5 percentage points or more as of the date the interest rate is set. A loan receives a rebuttable presumption that the consumer has the ability to repay if the APR exceeds the average prime offer rate for a comparable transaction by 1.5 percentage points or more, but by less than 2.25 percentage points.
The second final rule created a new category of QMs, called seasoned QMs. Seasoned QMs meet the following criteria:
This rule also requires the loan to have no more than two delinquencies of 30 or more days, and no delinquencies of 60 or more days at the end of the seasoning period.
For more information, contact our regulatory specialists today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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