Mortgage brokers are licensed people that can advise people on getting residential and Commercial loans. If it is owner occupied, they have to use the new laws through Dodd-Frank. The CFPB oversees legal enforcement for Residential Mortgages.
he Dodd-Frank Wall Street Reform and Consumer Protection Act introduced the Ability-to-Repay (ATR) rule to ensure that lenders make responsible mortgage lending decisions.
Here’s a brief overview:
Ability-to-Repay (ATR) Rule
- Purpose: Requires lenders to make a reasonable, good faith determination that a borrower has the ability to repay their mortgage.
- Qualified Mortgages (QM): Loans that meet certain criteria are considered “Qualified Mortgages,” which provide lenders with legal protections against borrower lawsuits.
- Requirements: Lenders must consider factors like income, assets, employment, credit history, and monthly expenses.
- Protection: Helps protect consumers from risky loans and predatory lending practices.
In essence, the ATR rule aims to ensure that borrowers are not given loans they cannot afford, promoting safer lending practices and protecting consumers.
