The Consumer Finance Protection Bureau (CFPB) has changed the underwriting
requirements for 1-4 family lending. Here are the highlights:
- You may not make a 1-4 family loan unless you have made a reasonable, good faith determination, based on verified and documented information, that the borrower has the ability to repay the loan according to its terms.
- Compliance is presumed for certain traditional loans with limited prepayment penalties and points and fees of 3% or less of the loan amount.
- There are exceptions for refinancing non-standard loans.
- Foreclosure defenses available to borrowers have been strengthened for Truth in Lending Act violations.