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Tuesday, February 3, 2015


CFPB Proposes Easing Rules for Small Mortgage Lenders

On Jan. 29, the Consumer Financial Protection Bureau proposed that rules for small mortgage lenders be relaxed so that more community banks and credit unions could extend loans to borrowers with higher debt levels. The CFPB last year implemented tougher rules for issuing mortgages, many of which do not apply to smaller lenders, including verifying a borrower’s ability to repay and ensuring that the borrower's total debt payment is not more than 43 percent of pretax income. Under the proposal, more banks and credit unions could achieve small-lender status, allowing them to make riskier loans and give mortgages to borrowers above the 43-percent limit. To qualify as a small lender, banks and credit unions currently are limited to issuing no more than 500 loans a year, but the new proposal would remove that 500-loan cap.

From "CFPB Proposes Easing Rules for Small Mortgage Lenders"
Wall Street Journal (01/30/15) Zibel, Alan

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