United States

CFPB seeking comment on Ability to Repay/Qualified Mortgage rule


The Consumer Financial Protection Bureau (CFPB) is seeking public comment on the Ability to Repay (ATR)/Qualified Mortgage (QM) rule. After a 60-day comment period, the CFPB will consider all comments in its full assessment of the ATR/QM rule. This assessment is required under the Dodd-Frank Act, section 1022(d). Upon completion of the assessment, the CFPB will issue a report, no later than January 2019.

To assess the effectiveness of the ATR/QM rule, the CFPB will examine the impact of major provisions of the rule, including mortgage cost, origination volumes, approval rates and subsequent loan performance. Also, to be considered are underwriting policy and procedures, including the ATR requirements and the QM provisions, which include the debt-to-income (DTI) threshold, the points and fees threshold, the small creditor threshold, and the applicable verification and third-party documentation requirements.

Certain categories of borrowers are of special interest in the assessment, including self-employed borrowers; those borrowers relying on income from assets; borrowers with part-time, seasonal, bonus or overtime income; borrowers seeking smaller-than-average loan amounts; borrowers with a DTI over 43 percent, low and moderate income borrowers; minority borrowers and rural borrowers.