Bloomberg Law
Oct. 6, 2020, 10:00 AM

CFPB May Trip Over Dodd-Frank in Mortgage Rule Revamp

Evan Weinberger
Evan Weinberger
Assistant Managing Editor

The Consumer Financial Protection Bureau’s plans to create a new category of safer mortgages may run afoul of the law that created a standard to protect home loan borrowers.

The 2010 Dodd-Frank Act requires loans to meet certain standards—such as borrowers’ ability to repay—at the time of origination to get “qualified mortgage” status. The bureau in August proposed a new class of “Seasoned QMs,” which would allow certain loans that didn’t meet the QM status at origination but perform well over a three-year period to count as true qualified mortgages.

The problem is the Dodd-Frank Act doesn’t allow for so-called ...

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