The Consumer Financial Protection Bureau has proposed a number of technical changes to the qualified mortgage rule that are pretty substantial when it comes to underwriting QM loans.
The final QM ability-to-repay rule issued in January suggested that underwriters should be predictive and gauge the borrower’s ability to hold their job over the next three years.
The CFPB adopted this requirement from a HUD handbook on mortgage credit analysis.
But lenders complained that employers refuse to confirm a borrower’s future job status.
In a
“The bureau is proposing to remove the requirement that creditors obtain the employers confirmation of continued employment’ and instead require only that creditor examine a confirmation of current, ongoing employment,” the proposal says. The CFPB is seeking comment on the proposed QM rule changes for a short 30-day comment period.
In issuing the QM rule, CFPB officials said they would provide guidance and respond to questions. But industry groups were skeptical, according to Richard Andreano, a practice attorney at Ballard Spahr.
“But it looks like the bureau is following through on that and the industry generally views that as positive,” Andreano told NMN.
“They are trying to make the underwriting guidelines they adopted work in the real world,” he added.
