U.S. Consumer Financial Protection Bureau in Process of Restructuring Regulation of the Residential Mortgage Market: Qualified Mortgage Rule Emerges as Critical Issue


Under the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) has broad responsibility to regulate the residential mortgage finance industry. The CFPB has recently taken several actions in this area, such as issuing a proposed rule to adopt a new loan estimate form and a new closing disclosure form and announcing that it will issue proposals on mortgage loan originator compensation and on mortgage servicing requirements. However, what may be most important is its current rulemaking to define a “qualified mortgage” (QM) under the Dodd-Frank Act.

Title XIV of the Dodd-Frank Act addresses problems in the U.S. housing mortgage system. A key element of the reforms is an amendment to the Truth in Lending Act (TILA) to ensure that lenders generally do not make residential mortgage loans unless they make a reasonable and good faith determination that the borrower has the ability to repay the loan at the time the loan is made. Lenders can satisfy this requirement by making a QM loan or by making a non-QM loan that satisfies several other underwriting requirements.

Please see full alert below for more information.

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

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

Written by:


Dechert LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*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. Or, sign up using your email address.