Federal Reserve’s Proposed Rule to Implement the Ability-to-Repay Requirements for Residential Mortgage Loans and its Impact on Lenders and RMBS Investors


The Board of Governors of the Federal Reserve System (the “Board”) on May 11, 2011 published a proposed rule1 concerning implementation of the ability-to-repay requirements imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”)....

The Act amends the Truth in Lending Act (“TILA”) to prohibit creditors from making mortgage loans without regard to the con-sumer’s repayment ability. The Act’s underwrit-ing requirements are substantially similar but not identical to the ability-to-repay require-ments for higher-priced mortgage loans adopted in July 2008 under the Home Ownership and Equity Protection Act2 (“HOEPA”). However, unlike the HOEPA rule, the proposed rule is not limited to higher-priced mortgage loans or loans secured by the borrower’s principal dwelling...

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dechert LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.