Recent interest-rate decreases have led to a resurgence in the mortgage market, with refinance activity up sharply from levels a year ago. But lenders have underwriting on their minds for reasons other than increased application volume.
The CFPB recently affirmed that it intends to allow the so-called GSE Patch to its Ability-to-Repay/Qualified Mortgage Rule to expire in early 2021. This has home loans executives and their advisors assessing their underwriting obligations in a world without this heavily utilized compliance safe harbor. In advance of the elimination of the patch, the Bureau is requesting comments regarding potential changes to the Rule and the Qualified Mortgage definition.