However, the bureau is not planning to issue any new guidance or rule changes until the lenders have adjusted to the new QM lending regime, according to Peter Carroll, who is in charge of the CFPB’s Office of Mortgage Markets.
“At this point, any new guidance might be the straw that breaks the camel’s back,” he said at a Women in Housing and Finance event Wednesday evening.
Carroll noted the bureau might consider a materiality threshold for lenders that inadvertently exceed the 3% points and fees cap or the 43% debt-to-income ratio.
The bureau doesn’t want lenders to adopt a 2.5% cap or a 41% DTI limit to protect themselves from regulatory or litigation risk, he said.
The CFPB assistant director also indicated the QM rule does not provide any way to correct mistakes post-closing. He suggested that a lender should be able to cure a mistake within a certain timeframe.
The Office of Mortgage Markets also is eyeing the threshold between prime QM loans that enjoy a safe harbor from litigation and subprime QM loans which are afforded less legal protection.
The current threshold is 150 basis points. But the bureau intends to conduct an analysis on moving it up to 200 bps. With Fannie Mae charging loan-level price adjustments, 150 bps might be “too low,” Carroll said.
He stressed during his comments that the bureau has made no commitment to go forward with any of the actions or initiatives he touched on.
The Office of Mortgage Markets is responsible for monitoring and analyzing mortgage markets and products as well as assessing the impacts of mortgage rulemaking on providers, consumers and other stakeholders.