Pending CFPB Mortgage Rules Forcing Changes
As a result of the new qualified mortgage rule from the Consumer Financial Protection Bureau, nearly half (44%) of credit unions in a survey conducted by NAFCU indicated they will cease originations of non-qualified mortgages, while another 44% will reduce originations.
The NAFCU Economic and CU Monitor Survey found 51.2% of respondents have begun implementing the ability-to-pay and QM rules. With respect to the QM rule, NAFCU said 37.5% of respondents originated loans in 2012 that would not satisfy the criteria of the rule.
Of those who originate such loans, the median amount of these loans as a percent of total originations was 5%, the NAFCU survey found. The new rules go into effect Jan. 10, 2014.
Among the other findings:
* 76.2% service mortgages. For those who do, the majority expect the CFPB’s mortgage servicing requirements to cost less than $10,000, both in initial setup costs and ongoing expenses. However, 11.5% of respondents expect initial setup costs to exceed $50,000 and 7.1% expect ongoing costs to exceed $50,000.
* The new rule has led 10% of survey participants to seek a third-party mortgage servicer.
* 51.4% of respondents will need to make changes to periodic billing statements due to the rule, and 18.2% say that the 120-day waiting period for loss-mitigation actions conflicts with a state rule.
* 23.3% of respondents applied for a waiver recently. Of that number, 55.6% applied for a fixed asset waiver, while 44.4% applied for a member business loan waiver. Most of the requests (89%) were granted, NAFCU, found, but 41.7% said the process was difficult, while 25% said it was easy.