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CFPB Issues Consumer Advisory, Raises QM Concerns

The Consumer Financial Protection Bureau issued a consumer advisory report on Wednesday which is provoking concerns that the agency may be inadvertently encouraging borrowers to challenge their lenders in court after new mortgage rules go into effect in the new year.

Under next month's rules, lenders that make qualified mortgages have greater legal protections than those that do not. In the fact-sheet issued by the CFPB to consumers, the agency explained that borrowers still have recourse against lenders, and that the agency would support them.

"The key point here is that we left little room for legal challenges to whether a given mortgage is a QM," said Cordray at the Mortgage Bankers Association's annual conference in Washington in October. "We crafted the rule to avoid that result, which is why critics are now forced to dream up hypothetical factual disputes about whether debts and income were correctly calculated in their efforts to criticize the rules or sow anxiety about them."

"Taking on a mortgage may be the largest financial obligation of a consumer's lifetime," said Cordray in the release. "We want to make sure that potential homebuyers have the information they need to make responsible decisions and that current borrowers know about their new protections."

For the full piece see "CFPB Advisory Provokes New Qualified Mortgage Concerns" (may require subscription).

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