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CFPB Mortgage Rule is Less Restrictive than What Was Feared

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"Despite widespread fears by lenders that a 800-page rule released Thursday by the Consumer Financial Protection Bureau would end mortgage lending as we know it, the final regulation appeared to be significantly less onerous than many expected," writes American Banker's  Rachel Witkowski.
 
The CFPB, created under the Dodd-Frank reform law, broadened the definition of qualified mortgages and granted a safe harbor protection to loans.
 
"The rule is a little less restrictive than what lenders feared, especially" with the safe harbor protection, said Leonard Bernstein, partner and chair of the Financial Services Regulatory Group at Reed Smith. "The safe harbor is very helpful for the prime market and should please lenders."
 
The safe harbor "does not relieve lenders from compliance with a plethora of other lending laws and fair lending," Bernstein said. "I do not expect immediate loosening of credit as there are other factors like GSE reform that need to be addressed."
 
For the full piece see "CFPB's Mortgage Rule Better Than Expected, Banks Say" (may require subscription).

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