In This Issue:
- FEDERAL ISSUES
- STATE ISSUES
- FIRM NEWS
- FIRM PUBLICATIONS
- CONSUMER FINANCE
- PRIVACY/DATA SECURITY
- Excerpt from Federal Issues:
CFPB Issues Ability to Repay/Qualified Mortgage Rule and High-Cost Mortgage Rules. On January 10, the CFPB issued a rule that will require creditors to verify a consumer's ability to repay prior to making almost any type of mortgage loan. The rule defines a "qualified mortgage," providing a safe harbor from liability for loans with an APR below Regulation Z's "higher priced" threshold of 150 basis points above the Average Prime Offer Rate, and a "rebuttable presumption" for loans with an APR above that threshold. The rule will become effective on January 10, 2014. Concurrently, the CFPB released a proposal seeking comment on amendments to the final rule that would, among other things, provide exemptions for certain community-based lenders and small portfolio creditors and potentially change the treatment of indirect lender compensation for purposes of the qualified mortgage "points and fees" test. BuckleySandler has prepared a Special Alert that highlights a few key issues resolved and left open by the nearly 1,000-page releases on the rule and concurrent proposal. We will distribute a summary and additional analysis of key issues in the releases once we complete our review of them.
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