CFPB's Ability-to-Repay and Qualified Mortgage Rule: Key Implications and Developments Looking Forward

On January 10, 2013, the Consumer Financial Protection Bureau issued final rules setting out new standards for mortgage underwriting and escrow requirements, implementing key consumer protections of the Dodd-Frank Act. Significantly, the CFPB rules set the long-awaited standards on “Ability-to-Repay” and “qualified mortgages”, which will help define the future of American mortgages. The attached Alert provides an overview, highlighting significant issues and noting key implications and developments looking forward, particularly GSE reform, the risk retention requirements and capital rules.