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Special Alert: CFPB Finalizes Additional Amendments to ATR/QM Rule; Agencies Propose Appraisal Rule Amendments

CFPB Appraisal Qualified Mortgage

Consumer Finance

On July 10, the Consumer Financial Protection Bureau ("Bureau") finalized important amendments (the "Amendments") to its ability-to-repay / qualified mortgage rule (the "QM / ATR Rule") that are intended to ease certain compliance challenges with making qualified mortgages ("QMs"). In response to industry concerns on the extensive underwriting requirements in Regulation Z's new Appendix Q, the Bureau acknowledged that certain of its provisions were "not well-suited to function as regulatory requirements" and, as a result, finalized major revisions to the methodology for determining a consumer's monthly debt and income for purposes of making a QM under the 43% debt-to-income ("DTI") underwriting alternative.

The Amendments, which had been proposed in April of this year (the "April Proposal"), also finalize clarifications to its mortgage servicing and escrows rules that were issued this January.  Like the mortgage rules themselves, the Amendments will take effect on January 10, 2014.

Separately, on the same date, the Bureau, together with the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Federal Housing Finance Agency, National Credit Union Administration, and Office of the Comptroller of the Currency (the "Agencies") issued proposed amendments to their January 2013 final rule governing appraisal practices.

 Click here to read the special alert.

Questions regarding the matters discussed in this Alert may be directed to any of our lawyers listed below, or to any other BuckleySandler attorney with whom you have consulted in the past.