The CFPB’s final rule amending certain provisions of the 2013 Title XIV final mortgage rules which includes a post-consummation points and fees cure mechanism for qualified mortgage loans, became effective on Monday, November 3, when it was published in the Federal Register. (The only exception is a commentary revision in the final rule dealing with the relationship between the QM cure and the RESPA/Regulation X tolerance cure under the
TILA-RESPA integrated disclosure rule that becomes effective next year.) The cure provision will apply to loans consummated on or after November 3, 2014 and on or before January 10, 2021.
The CFPB’s final rule also includes an amendment to the exemption in the ability-to-repay rule for certain nonprofits that make mortgage loans to low or moderate income borrowers from certain provisions of the rule if they make no more than 200 dwelling-secured loans per year and meet other specific requirements. The rule amended the exemption so that subordinate lien loans for down payment assistance and certain other purposes that are interest-free, forgivable, and meet certain other conditions (so-called “soft seconds”) would not count toward the annual 200 loan limit.
In an announcement also published in the November 3 Federal Register, HUD announced that it was adopting the CFPB’s amendment to the nonprofits exemption for purposes of HUD’s QM rule that applies to FHA-insured mortgages. However, HUD also announced that it was not adopting the CFPB’s post-consummation QM cure mechanism for purposes of HUD’s QM rule. Among the reasons given by HUD is that FHA loans must meet all eligibility requirements, including the QM points and fees limit, prior to insurance endorsement and the CFPB’s cure is inconsistent with this requirement because it would allow a points and fees cure beyond insurance endorsement.