Proposed Ability-To-Repay Rules For Consumer Mortgages

April 20, 2011 at 4:31 pm Leave a comment

New rules have been proposed for creditors under Regulation Z that, if implemented, would require creditors to determine a consumer’s ability to repay a mortgage before making the loan and would establish minimum mortgage underwriting standards. The proposal provides four options for complying with the ability-to-repay requirement.   In addition, the proposal also implements the limits on prepayment penalties set out in the Dodd-Frank Act and lengthens the time creditors must retain records that evidence compliance with the ability-to-repay and prepayment penalty provisions.

The Federal Reserve Board has requested public comment  until July 22, 2011 on the proposed rules that will ultimately be finalized by the new Consumer Financial Protection Bureau.  

Highlights of the Proposed Ability-To-Repay Rules from the Federal Reserve are available here.

The Federal Reserve Press Release regarding the Proposed Rules is available here

The Notice of the Proposed Rule is available here.

Entry filed under: Uncategorized.

Karen Garrett Featured Panelist at Regulatory Compliance and Risk Management for Financial Services Forum Revised Final CARD Act Rules: The End of “Household Income” and Other Changes

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