The Consumer Financial Protection Bureau (CFPB) published two reports, one assessing effectiveness of its Ability-to-Repay and Qualified Mortgage Rule (ATR/QM) and the other assessing the effectiveness of its 2013 mortgage servicing rule issued under the Real Estate Settlement Procedures Act (RESPA).
The first report determined that its ATR/QM Rule was “significant,” adding that it did not contribute to increased costs or prices related to the housing market. Indeed, the CFPB emphasized the value of the ATR/QM Rule in addressing the problems that contributed to the housing bubble meltdown.
“Approximately 50 to 60 percent of mortgages originated between 2005 and 2007 that experienced foreclosure in the first two years after origination were mortgage loans with features that the ATR/QM Rule generally eliminates, restricts or otherwise excludes from the definition of a qualified mortgage, such as loans that combined low initial monthly payments with subsequent payment reset or those made with limited or no documentation of the consumer's income or assets,” the report stated. “Loans with these features had largely disappeared from the market prior to the adoption of the Rule, and today they appear to be restricted to a limited market of highly credit-worthy borrowers.”
The second report also used the word “significant” to define its RESPA servicing rule, noting that at least 26,000 additional borrowers who became delinquent in 2014, the year the rule was implemented, would have gone into foreclosure within three years of becoming delinquent on their mortgage payments. But the report acknowledged that the rule came with a price that was carried by the mortgage industry.
“Larger servicers estimated that the Rule had increased annual costs by amounts ranging from approximately $3.00 per loan to more than $11.00 per loan,” the report said.