North Dakota Bankers Association - link home

About Us Government Relations and Legal Education Business Partners Communications



Fed Issues Dodd-Frank Mortgage Proposal

Posted on 4/21/2011

The Federal Reserve has issued a proposal under the Dodd-Frank Act that would require a creditor to determine a consumer's ability to repay a mortgage before making the loan, and would establish minimum mortgage underwriting standards. The proposal would apply to all consumer mortgages except home equity lines of credit, timeshare plans, reverse mortgages, and temporary loans.

The proposal would provide four options for complying with the ability-to-repay requirement. A creditor could consider and verify specified underwriting factors, such as the consumer's income or assets, make a "qualified mortgage, or issue a balloon-payment qualified mortgage in a rural or underserved area. In addition, a creditor could refinance a "non-standard mortgage" into a more stable standard mortgage with a lower monthly payment.

The proposal also asks for comments on two alternative approaches for defining a "qualified mortgage."

The Fed noted that it will not finalize the proposed rule, as the comment deadline occurs the day after its rule making authority will transfer to the Consumer Financial Protection Bureau on July 21.

To read more visit:

Members Only
Calendar of Events

2018 HSA Workshop

2018 IRA Seminars

2018 Ag Credit Conference

Fighting Financial Crimes Conference