Trump mortgage credit order draws praise from lenders

"The executive order calls for the Consumer Financial Protection Bureau (CFPB) to reform the ability-to-repay and qualified mortgage (QM) rules, including a potentially broader QM safe harbor for portfolio loans, replacing TRID timing requirements with a materiality-based standard, and easing caps on points and fees for small-balance mortgages."

"Some of the elements of the executive order require congressional action, and Congress is 90% of the way through their big housing bills. A lot of this would need to go through notice and comment rulemaking, which takes time. Realistically, you're not looking until the very end of 2026, the beginning of 2027, before you actually have final rules."

"Regulators would shift supervision toward the evaluation of lenders' underwriting practices and ability-to-repay policies, rather than strict technical compliance. Good-faith errors would be handled through corrective measures unless they result in borrower harm or repeated violations."

An executive order targets mortgage lending cost reduction through multiple regulatory reforms. The CFPB is directed to reform ability-to-repay and qualified mortgage rules, broaden QM safe harbors for portfolio loans, replace TRID timing requirements with materiality-based standards, and ease points and fees caps for small-balance mortgages. Additional proposals include modernizing rescission rules through digital processes, streamlining rate-and-term refinancing requirements, and exempting certain refinances from rescission rights. Regulators would shift supervision focus from strict technical compliance to evaluating underwriting practices and ability-to-repay policies, with good-faith errors handled through corrective measures unless borrower harm or repeated violations occur. However, several provisions require congressional action and notice-and-comment rulemaking, extending implementation timelines significantly.

Read at www.housingwire.com