St Casimirs Mortgage Minute

Fed, SEC Approve Risk Retention Rule

The Federal Reserve Board and the Securities and Exchange Commission yesterday voted to finalize the Dodd-Frank Act’s mortgage risk retention rule, aligning the qualified residential mortgage, or QRM, standard with the Consumer Financial Protection Bureau’s Qualified Mortgage rule. Other regulators finalized the joint rule on Tuesday.

The SEC voted 3-2, with both Republican commissioners opposing the final rule, while the Fed board voted unanimously.



ABA Applauds Changes to CFPB Points and Fees Cure Provision


The Consumer Financial Protection Bureau yesterday finalized a limited “cure” provision for the Qualified Mortgage rule, allowing a lender that intends to originate a QM but that later finds that points and fees exceeded the 3 percent cap to refund the excess, plus interest, within 210 days and maintain the legal protections afforded to QMs.

The bureau made several ABA-advocated changes to the final rule. It increased the cure period by 90 days and eliminated the “good faith” requirement, which ABA said injected a subjective element that negates a cure provision’s legal protections. However, the bureau limited creditors’ ability to cure after legal action, a 60-day delinquency or when a borrower identifies a points and fees miscalculation.

The cure provision takes effect upon publication in the Federal Register and will last until Jan. 10, 2021, at which point “creditors should become less reliant on points and fees buffers,” the CFPB said.

---ABA Daily Newsbytes