In the September 30, 2013 issue of the Federal Register (78 FR 59890), click here, the Department of Housing and Urban Development (HUD) published a proposed rule that submits for public comment its definition of “qualified mortgage” for the types of loans that HUD insures, guarantees, or administers that aligns with the ability-to-repay criteria of the CFPB’s definition of “qualified mortgage” in its final rule. In this proposed rulemaking, HUD proposes that any forward single family mortgage insured or guaranteed by HUD shall meet the criteria of a qualified mortgage, as defined in the proposed rule, and HUD seeks comment on all components of its definition. HUD proposes to designate Title I (home improvement), Section 184 (Indian housing), and Section 184A (Native Hawaiian housing) insured mortgages and guaranteed loans to be safe harbor qualified mortgages and proposes no changes to the underwriting requirements of these mortgage and loan products. However, for those loans insured under Title II of the National Housing Act, HUD proposes two categories of qualified mortgages similar to the two categories created in the CFPB final rule: (i) a safe harbor qualified mortgage and (ii) a rebuttable presumption qualified mortgage. Download complete memorandum below
