CFPB Makes Needed Changes to Qualified Mortgage Rules

The Consumer Financial Protection Bureau today issued final rules related to qualified mortgage loans, which require lenders to determine at the onset that consumers have the ability to repay the loans. CEI Senior Fellow John Berlau praised improvements that reward responsible lenders and discourage loans that end up putting taxpayers at risk:

“The Consumer Financial Protection Bureau’s revisions today to regulations implementing Dodd-Frank’s ‘qualified mortgage’ rule will both ease the burden on borrowers and Main Street banks and credit unions and provide more stability to the housing market.

“By creating the new category of ‘seasoned qualified mortgages,’ the CFPB lightens the burden on the most responsible financial institutions: those banks and credit unions that keep the loans on their books and don’t immediately sell them off to the government-sponsored enterprises (GSEs).

“In combination with the new regulatory capital rule of the Federal Housing Finance Agency, the CFPB regulations curb perverse incentives to make risky loans and sell them off to GSEs that had been exempt from debt-to-income rules. Together, the new policies of the CFPB and FHFA will help ensure that the American housing market is both vibrant and stable.”