Friday, January 18, 2013
New Consumer Financial Protection Bureau Regulations Strenthen Mortgage Consumer Protection Safeguards
The Ability to Pay determination and the definition of Qualified Mortgages will be tightened as of January 10, 2014. Lenders will be required to use more stringent underwriting standards in assessing whether a borrower can actually repay a consumer transaction secured by a dwelling. The definition of a Qualified Mortgage has also been changed to protect consumers from liability for loans containing balloon payments, interest only payments and terms over 30 years, among other provisions. The Consumer Financial Protection Bureau amended Regulation Z of the Truth in Lending Act in order to implement sections of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For more information about mortgages see our page: Massachusetts Law About Mortgage Brokers and Lenders.