The Consumer Financial Protection Bureau still has to make a key decision before it can finalize a regulation that will determine what kind of loans -- and features -- mortgage bankers can offer consumers without facing potential legal liability of up to $100,000 per unit.

The regulation is the known as the "Qualified Mortgage" rule and lenders are seeking a "safe harbor" to easily protect themselves from liability. The alternative is a "rebuttal presumption" of compliance with the QM rule, which lenders claim would lead to litigation and reduce the availability of mortgage credit. 

CFPB director Richard Cordray told the Senate Banking Committee Tuesday that his agency is still considering the issue.

"I don't have an outcome for you today," Cordray said, noting that most institutions would like a safe harbor so the rule does not create litigation risk and uncertainties. "Others have taken a different point of view," he added.

The CFPB director noted the QM rule intersects with another important mortgage regulation mandated by the Dodd-Frank Act that six other regulatory agencies are working on.  "We know we need to move it along," Cordray said.  

CFPB wants to issue the QM rule by the end of April. (See related story on the CFPB on the National Mortgage News website.) But an industry advisor who tracks such matters told NMN that the April deadline is likely to slip a month or two.

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