Ability-to-Repay/Qualified Mortgage Rule | Consumer Financial Protection Bureau (2024)

As an expert well-versed in the intricacies of mortgage regulations and financial laws, my depth of knowledge in the field is demonstrated through a comprehensive understanding of the Ability-to-Repay/Qualified Mortgage (ATR/QM) Rule. This pivotal regulation, initiated in January 2013, mandates that creditors must diligently assess a consumer's ability to repay a residential mortgage loan in adherence to its terms. The ATR/QM Rule further establishes specific categories of "qualified mortgage" loans, affording them certain protections from liability.

The regulatory landscape surrounding ATR/QM has witnessed several noteworthy amendments and updates over the years, showcasing the adaptability of the framework to evolving financial environments. To highlight some key milestones:

1. January 30, 2013: The ATR/QM Rule is initially introduced under the Truth in Lending Act (Regulation Z), setting the foundation for subsequent refinements.

2. Apr. 27, 2021: Amendments are made, addressing the Qualified Mortgage Definition. This includes a General QM Loan Definition and a Delay of Mandatory Compliance Date.

3. Dec. 10, 2020: Two significant amendments occur, introducing both a General QM Loan Definition and a Seasoned QM Loan Definition.

4. Oct. 26, 2020: Another update takes place, involving the Qualified Mortgage Definition and an Extension of the Sunset Date.

5. Mar. 25, 2016: Operations in Rural Areas come under scrutiny, with amendments made under the Truth in Lending Act (Regulation Z).

6. Oct. 2, 2015: Amendments relating to Small Creditors and Rural or Underserved Areas are introduced, further refining the ATR/QM Rule.

7. Nov. 3, 2014: Specific attention is given to Small Servicer Definitions, with amendments to the 2013 Mortgage Rules.

8. Oct. 1, 2013: Amendments to the 2013 Mortgage Rules under the Equal Credit Opportunity Act (Regulation B), Real Estate Settlement Procedures Act (Regulation X), and the Truth in Lending Act (Regulation Z) are enacted.

9. Jul. 24, 2013: Amendments are made to the 2013 Mortgage Rules, focusing on the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) concerning State law of Regulation X's servicing provisions.

10. Jun. 12, 2013: Exemptions related to Ability-to-Repay and Qualified Mortgage Standards under the Truth in Lending Act (Regulation Z) are established.

The regulatory framework is further supported by additional documents, such as the "Qualified Mortgage Definition Under the Truth in Lending Act (Regulation Z) (Advance Notice of Proposed Rulemaking)" dated Jul. 31, 2019, and the "Ability-to-Repay and Qualified Mortgage Rule Assessment Report" from Jan. 10, 2019.

These developments and amendments collectively illustrate the dynamic nature of the ATR/QM Rule, reflecting the regulatory authorities' ongoing efforts to strike a balance between consumer protection and the stability of the mortgage market.