On August 14th, the CFPB released an update to the Small Entity Compliance Guide for the Ability-to-Repay and Qualified Mortgage Rule, incorporating the changes made in the June 2013 Concurrent Final Rule and July 2013 Final Rule. The updated guide includes a new section detailing the exemptions added by the June 2013 Concurrent Final Rule for certain creditors and loan programs, such as designated community development organizations, certain nonprofit organizations, and loans made pursuant to housing finance agency programs.
A new section is included covering the types of QMs that can be made by Small Creditors, in addition to General and Temporary QMs. The new section details the requirements for a loan to be considered a Small Creditor QM under § 1026.43(e)(5) and a Balloon-Payment QM under § 1026.43(e)(6). The section on higher-priced QMs is amended to reflect the new APR threshold for Small Creditor and Balloon Payment QMs. That threshold was changed from 1.5 to 3.5 percentage points above APOR for first lien loans in the June 2013 Concurrent Final Rule.
The updated guide amends the section regarding the inclusion of loan originator compensation for the points and fees calculation, deleting compensation paid by a creditor to a retail loan officer employee. Additional guidance is provided for making the determination of eligibility under the Temporary QM definition. Pursuant to the July 2013 Final Rule, the updated guide reflects the additional eligibility criteria of valid recommendations from a GSE Automated Underwriting System or agency underwriting tool, GSE or agency guidelines from official manuals, written agreements between a GSE or agency and the creditor, and individual loan waivers from a GSE or agency.