Remigio Ferrara

Private Mortgage Lender

Remigio Ferrara - NMLS ID #476380
Senior Loan Officer, McLean Mortgage Corporation

11325 Random Hills Road Suite 400 Fairfax, VA 22030
Website • Office: 571-419-6632 • Cell: 703-622-6999

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Federal regulators provide guidance on Qualified Mortgage fair lending risks

October 22, 2013 by Remigio Ferrara

Board of Governors of the Federal Reserve System
Consumer Financial Protection Bureau
Federal Deposit Insurance Corporation
National Credit Union Administration
Office of the Comptroller of the Currency

For immediate release

October 22, 2013

Federal Regulators Provide Guidance on Qualified Mortgage Fair Lending Risks

Five federal regulatory agencies today issued a statement to address industry questions about fair lending risks associated with offering only Qualified Mortgages. Creditors have asked for clarity regarding whether the disparate impact doctrine of the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B, allows them to originate only Qualified Mortgages. For the reasons described in the statement, the five agencies do not anticipate that a creditor’s decision to offer only Qualified Mortgages would, absent other factors, elevate a supervised institution’s fair lending risk.

The Consumer Financial Protection Bureau’s Ability-to-Repay Rule implements provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that require creditors to make a reasonable, good faith determination that a consumer has the ability to repay a mortgage loan before extending credit to the consumer. Lenders are presumed to have complied with the Ability-to-Repay Rule if they issue Qualified Mortgages, which must satisfy requirements that prohibit or limit risky features that harmed consumers in the recent crisis.

The ECOA makes it illegal for a creditor to discriminate in any aspect of a credit transaction based on characteristics including race, religion, marital status, color, national origin, sex, and age.

The agencies note the decisions creditors will make about product offerings in response to the Ability-to-Repay Rule are similar to decisions creditors have made with regard to other significant regulatory changes affecting particular types of loans. The statement counsels that creditors should continue to evaluate fair lending risk as they would for other types of product selections, including by carefully monitoring policies and practices and implementing effective compliance management systems.

The agencies issuing the statement with supervisory authority for the Fair Housing Act (FHA) believe that the same principles apply in determining compliance with the FHA and its implementing regulation.

The statement is being issued by the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.

Attachment (32 KB PDF)

Media Contacts:
Federal Reserve Susan Stawick 202-452-2955
CFPB Sam Gilford 202-435-7673
FDIC Andrew Gray 202-898-7192
NCUA Ben Hardaway 703-518-6333
OCC Stephanie Collins 202-649-6870

Filed Under: Banking & Consumer Reg Policy

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Remigio Ferrara

Senior Loan Officer, McLean Mortgage Corporation

11325 Random Hills Road, Suite 400
Fairfax, VA 22030

Website: www.mcleanlending.com/lo_rferrara.php
Office: 571-419-6632
Cell: 703-622-6999
NMLS ID #476380

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DC Mortgage Loan Originator #: MLO476380
DE Mortgage Loan Originator #: MLO-476380
FL Mortgage Loan Originator #: LO30974
NC Mortgage Loan Originator #: I-158100
SC Mortgage Loan Originator #: MLO – 476380
VA Mortgage Loan Originator #: MLO-10666VA
WV Mortgage Loan Originator #: LO-38872
MD Mortgage Originator #: 26-21596
PA Mortgage Originator #: 46267
TN Mortgage Loan Originator #: 235241

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