Consumer Financial Protection Bureau Director Richard Cordray debunked myths on Thursday about the agency's new mortgage rule.
"Starting Jan. 10, the bureau will require that lenders take steps mandated under the Dodd-Frank Act to evaluate borrowers' 'ability to repay' mortgages. Gaining the most attention in the rule is the definition for loans to be considered 'Qualified Mortgages', which will have certain protections from legal action," writes American Banker's Joe Adler.
"Let me just take a moment to dispel some myths about what our ability-to-repay rule does and does not do, because many rumors have been going around," Cordray said in remarks to a conference hosted by the Consumer Federation of America.
Cordray addressed the common myth that the rule restricts down payments, the idea that it will apply to loans that were made before the Jan. 10 effective date, and he commented on the perception that the rule forbids DTI ratios above 43%.
For the full piece see "Cordray Counters 'Myths' About Imminent QM Rule" (may require subscription).