Friday morning is a turning point for mortgage lending professionals, as January 10, 2014 is the effective day for the Qualified Mortgage/Ability-to-Repay Rules. All mortgages will need to adhere to the extensive rules promulgated by the Consumer Financial Protection Bureau (“CFPB”) last January and updated on multiple occasions during 2013. Underwriting guidelines must be updated, and financial institutions’ compliance management systems must reflect the rulemaking requirements. For organizations that support the mortgage underwriting or origination process, additional requirements need to be implemented.
The CFPB issued a Mortgage Rules Readiness Guide in December 2013 that provides invaluable guidance to financial institutions and their compliance efforts. Mortgage professionals and compliance officers should review this guide, other CFPB materials available on its website, and this blog or other resources to assist with updates.
Should your financial institution have questions or need assistance with the new mortgage rules before or after January 10, please contact Spilman or other knowledgeable counsel.