Regulation Z – Ability-to-Repay & Qualified Mortgages: Strategic Planning Issues for Management
The Ability-To-Repay Rules are game-changers that will significantly change the mortgage products banks offer and how they underwrite them. This program will explain the final rules and help you prepare for the changes to your lending program.
On January 10, 2013 the Consumer Financial Protection Bureau (CFPB) published a final rule to revise the Truth in Lending Act (TILA) to require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling. The 804-page rule will be effective on January 10, 2014.
The Ability-To-Repay Rules, including the Qualified Mortgage Option, are game-changers. As a result of these rules some lenders will stop offering mortgage loans. Those that stay in the game will significantly change the mortgage products they offer and how they underwrite those products. This is more than a compliance issue; this is a strategic planning issue for bank management. This program will explain the final rules and help you prepare for the changes to your lending program.
- New Regulation Z Rules that require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling;
- The six options for meeting ability-to-repay requirements;
- The liability that results when an option other that the qualified mortgage (QM) option is selected;
- Safe harbor and rebuttable presumption of compliance protections from liability for QMs; and
- Unsettled issues which include, among others:
- Proposed exceptions for certain homeownership stabilization programs, such as those that offer loans made in connection with the Making Home Affordable program, which help consumers avoid foreclosure;
- Proposed QM status for certain loans made and held in portfolio by small creditors; and
- Proposed changes to the definitions of “points and fees” and “finance charges.”
- Participants receive a detailed manual that serves as a handbook long after the program is completed.
The program is designed for directors, senior management, compliance officers and others responsible for implementing the new rules.
Jack Holzknecht, CRCM, a principal with Pegasus Educational Services, LLC, has been delivering the word on lending compliance for 37 years. Jack’s career began as a federal bank examiner. He also headed the form and software division of a regional consulting company and spent seven years in charge of their education division. He also developed and delivered training for the FDIC and OTS.
Institute of Certified Bankers: Visit http://www.icbmembers.org/login.aspx for instructions regarding self-reporting. Estimated credits: 2.5 hours CRCM/CLBB.
Member price: $265.00 | Non member price $530.00
Member price: $280.00 | Non member price $560.00
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