As it said it would, the Consumer Financial Protection
Bureau (CFPB) has taken steps to assist small lenders, particularly those in
rural areas, comply more easily with the new mortgage rules that took effect at
the beginning of last year. Changes were
proposed on Thursday to the ability-to-repay rule and its category of loans
called Qualified Mortgages (QM) which CFPB said would, if enacted, increase the
number of financial institutions able to offer certain types of mortgages in
rural and underserved areas and help small creditors adjust their business
practices to comply with the new rules.
Ability-to-repay requires that lenders
generally make a reasonable and good faith determination that a borrower is
able to pay back a loan. Loans that
qualify as QMs are presumed to comply with ability-to-repay requirements
because of that category’s laundry list of prohibited risky loan features.