The Consumer Financial Protection Bureau (CFPB) issued a final rule on January 10, 2013, implementing the "ability to repay" provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The rule generally requires lenders to make a reasonable, good faith determination of a consumer’s ability to repay before originating a mortgage loan and establishes certain protections from liability for "qualified mortgages." The ability to repay rule will take effect for applications dated on or after January 10, 2014.
On May 2, 2013, FHFA directed Fannie Mae and Freddie Mac (the GSEs) to limit future acquisitions to loans that are (i) qualified mortgages under the ability to repay rule, including those meeting the special or temporary qualified mortgage requirements, or (ii) exempt from the “ability to repay” requirements, such as investor transactions.
Fannie Mae currently intends to continue purchasing Refi Plus™ and DU Refi Plus™ loans and loans sold under written variances to the Selling Guide. However, the CFPB has not yet issued a final rule regarding these items. Precisely whether and how these purchases will be affected will depend on the final rule.
For further information, please reference Lender Letter LL-2013-05.
Investors may contact Fannie Mae's Fixed-Income Securities Marketing Help Line at 1-800-237-8627 with any questions.Originally pubished: 05/06/13