Mortgage lenders are prepared for the January implementation of a new underwriting rule, the director of the Consumer Financial Protection Bureau told Congress Thursday, according to a Bloomberg report.
Speaking at a hearing of the House Financial Services Committee, CFPB head Richard Cordray said that most lenders would be ready to follow the so-called qualified mortgage rule, which requires that lenders take steps to confirm that a borrower will be able to repay a mortgage.
“Most of the institutions have told us that they will be in compliance,” Cordray said.
The qualified mortgage rule will apply to both banks that originate mortgages and nonbank lenders, Bloomberg reported.
While many smaller lenders have said that implementation of the rule would drive them out of the mortgage industry, Cordray told Congress that there were exemptions that could apply in those cases. “It would be a bad business decision if they left that money on the table and did not make those loans,” he said.