Yesterday, the Consumer Financial Protection Bureau (CFPB) amended the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM) and delayed the effective date of the prohibition on financing certain credit insurance premiums.
Three primary aspects of the ATR/QM Rule are addressed in the amendments, including: exemptions for certain non-profit and community creditors from the ability-to-repay rules; qualified mortgage standards for loans offered by certain small creditors to facilitate lending; and calculation of loan origination compensation for determining points and fees caps. The amended calculation rules exempt compensation paid by a mortgage broker or lender directly to their loan originator employees. However, the compensation paid by a creditor to a mortgage broker must still be included in the points and fees cap calculation.
The CFPB also finalized its May 10 proposal to delay the effective date of the prohibition on financing credit insurance premiums in connection with certain consumer credit transactions secured by a dwelling. Previously scheduled to take effect on June 1, the prohibition is delayed until January 10, 2014. The delay is in response to industry concerns about the uncertainty of whether and when credit insurance premiums may be charged periodically under the new rule. The Bureau will propose clarifications and seek industry comment regarding the rule.
Read the press release: CFPB Finalizes Amendments to Ability-to-Repay Rule
Read more on the final rules: Final Rules Focus