House Financial Services Committee Chair Jeb Hensarling (R-TX) said that the Committee will examine the CFPB’s qualified mortgage regulations and other mortgage regulations for their impact on the ability of community financial institutions to compete and offer sustainable and affordable mortgages or whether they will cause a further consolidation toward perceived too big to fail banks. The Committee will also examine the extent to which these regulations impact a qualified consumer’s ability to access credit. A consolidation in this market is already underway, noted the Chairman, including banks and other mortgage loan originators pull back from offering their products and services.
The CFPB adopted regulations implementing Dodd-Frank Act requirements that mortgage lenders consider consumers’ ability to repay home loans before extending them credit. The Dodd-Frank Act provides that qualified mortgages are entitled to a presumption that the creditor making the loan satisfied the ability-to-repay requirements. However, the Act did not specify whether the presumption of compliance is conclusive, thereby creating a safe harbor, or is rebuttable. The regulations provide a safe harbor for loans that satisfy the definition of a qualified mortgage. The regulations take effect on January 10, 2014.