COMMENTARY: by JONATHAN FOXX
Jonathan Foxx, former Chief Compliance Officer of two publicly traded financial institutions, is President and Managing Director of Lenders Compliance Group, the nation’s first full-service, mortgage risk management firm in the country.
On Thursday of this week (6/23/11), I will be speaking at the Empire State Mortgage Bankers Association.
Regulating or Underwriting?
Time and Venue
This speaking engagement will coincide with the publication of my forthcoming article on this subject in the National Mortgage Professional Magazine.
On May 11, 2011, the FRB issued a proposed rule (Rule) intended to implement ability-to-repay requirements for closed-end residential loans.
The Rule implements Section 1411, Section 1412, and part of Section 1414 of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010. Comments on the Rule are to be received by no later than July 22, 2011.
In my remarks, I will explore some of the salient features of the Rule, noting particularly that, as a revision to Regulation Z, it requires creditors to determine a consumer's ability to repay a mortgage before making the loan and would also establish certain minimum mortgage underwriting standards.
We will review how violations of the Rule would be incurred, the exposure to regulatory risk, and the ways by which a loan originator may be deemed or presumed to be in compliance with the Rule. I will also discuss how Qualified Mortgages (QMs) offer a safe harbor.Attendants will receive:
- Ability-to-Repay Chart
- Magazine Article
- Complete June Edition