twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from

Mortgage News Reprints
Put entire stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed stories free on your Web site or for your RSS reader.

News Archives
Archive of stories by month going back to 1999.

Press Releases
Reports and announcements from

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map
Mortgage Compliance News | Mortgage Compliance Newsletter | Mortgage Regulations
News about complying with mortgage laws, rules and regulations.

Cordray Dispels Ability-to-Repay Myths

DTI ratios addressed

Dec. 5, 2013

By Mortgage Daily staff

The head of the Consumer Financial Protection Bureau said that some rumors circulating about the Ability-to-Repay rule are just not true. He said that loans can still be made to borrowers with debt-to-income ratios that exceed 43 percent.

CFPB Director Richard Cordray explained that the Ability-to-Repay rule requires lenders to make a reasonable, good-faith determination that a borrower can afford a mortgage before the loan is approved. This includes an analysis of income, assets and debts.

He noted that Qualified Mortgages allow only relatively low points and fees and must follow some general underwriting guidelines. They can't include features like interest-only or negative-amortization payments.

Cordray made the comments Thursday during a speech at the Consumer Federation of America's 26th Annual Financial Services Conference, according to a copy of his prepared remarks.

Lenders can avoid QM and Ability-to-Repay requirements as long as they make a reasonable, good-faith determination that a borrower is able to repay a loan by verifying and documenting the numbers and considering certain factors.

The CFPB chief said that myths have been circulating about the Ability-to-Repay rule and took a moment to dispel them.

He said that only mortgage applications taken on or after Jan. 10, 2014, are impacted by the rule. Existing loans aren't affected.

Cordray also explained that the rule doesn't stop lenders from making loans with DTI ratios above 43 percent, noting that such a claim is wrong in three ways.

"First, lenders can also rely on the standards for loans backed by the GSEs or federal housing agencies," he said.. "Second, smaller local creditors can make the same kinds of solid loans they have always made if they choose to keep those loans in their own portfolio, as they often have done in the past. Third, lenders can simply use their own judgment when looking at your ability to repay, just as they always have done."

The director said that another myth is that the rule restricts down payments when, in fact, it says nothing about required down payments and leaves that decision to the lender and the borrower.

"In the end, our Ability-to-Repay rule is straightforward," Cordray stated. "It puts behind us the irresponsible lending that disrupted the housing market and so badly damaged our economy. And it provides strong new consumer protections while preserving needed access to mortgage credit."

next story

back to current headlines

Financial Regulation News | Mortgage Regulations
Bank and mortgage regulators, regulations and regulatory actions. Coverage of regulatory legislation and testimony.
Mortgage Conference News | Conference Calendar | Webinars
News about mortgage-related conferences and schedule of mortgage conferences,
mortgage Webinars and other mortgage events.
upcoming events: October | November | December | full calendar

Logout forgot

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders