CFPB Issues More Clarifications of Mortgage Rules

The Consumer Financial Protection Bureau has issued a new batch of clarifications to its qualified mortgage and servicing rules.

In originating a QM loan, the borrower cannot have a debt-to-income ratio greater than 43%.

The final rule issued Wednesday “clarifies and amends how several factors can be used to calculate a consumer’s DTI ratio,” the CFPB said.

“Such factors include a consumer’s employment record and income, business credit reports and other documents relating to self-employed consumers, Social Security income, and non-employment-related income such as from a trust or rental property.”

The final rule also clarified the standards lenders must meet in originating QM loans that are eligible for purchase by Fannie Mae, Freddie Mac or insured by the Federal Housing Administration.

“Where a loan is eligible for GSE or agency purchase, guarantee, or insurance, creditors do not need to satisfy the types of procedural and technical requirements that are completely unrelated to the consumer’s ability to repay,” the CFPB said.

The final rule also clarifies which mortgages should be counted in terms of the small servicer exemption and the bureau’s position on preemption of state servicing rules.