New CFPB Mortgage Rule Improves Protections for Minority Homebuyers

January 10 2013


Julian Teixeira

(202) 776-1812

WASHINGTON, D.C.—Yesterday the Consumer Financial Protection Bureau (CFPB) issued guidelines for their Qualified Mortgage (QM) regulation, which requires lenders to ensure that borrowers are able to repay loans. The QM regulation will help prevent lenders from issuing mortgages to consumers that they cannot afford—a key abuse that contributed to the collapse of the housing market. While the final rule does not reflect all of our recommendations, NCLR (National Council of La Raza) is pleased that CFPB has crafted a broad and inclusive definition of a Qualified Mortgage, which will ensure that Hispanic homebuyers are better protected from predatory lenders. 

“Greater numbers of Latinos will become first-time homeowners in the years to come, helping both the economic mobility of their families and the prosperity of our nation as a whole,” said Janet Murguía, President and CEO of NCLR. “We commend CFPB for adopting a broad definition of a Qualified Mortgage, which will foster an inclusive housing market for Hispanic families just starting out. The rule will require lenders to be sure that borrowers can afford their loans, a commonsense protection that will benefit the entire market.”

According to the CFPB, any home loan purchased by Fannie Mae and Freddie Mac, as well as any mortgages insured by the Federal Housing Administration, the U.S. Department of Veterans Affairs and the U.S. Department of Agriculture (USDA), will be considered a QM loan. In addition, all loans issued to borrowers whose debt-to-income ratio does not exceed 43 percent will also fall under QM parameters.

“The CFPB’s stance on the Qualified Residential Mortgage (QRM) demonstrates Director Richard Cordray’s commitment to equal access to homeownership for all qualified borrowers regardless of race, geography or economic strata. The Qualified Mortgage Rule is a critically important step in the broader movement toward rebuilding a housing finance system and promoting affordability and accessibility. In rejecting a restrictive QRM definition, the CFPB is sending a clear message that it seeks to foster a competitive marketplace with clear guidelines for industry underwriting and consumer readiness,” said Marc H. Morial, President and CEO, National Urban League.

“Asian Americans, Native Hawaiians and Pacific Islanders lost 54 percent of their wealth between 2005 and 2009, largely as a result of the foreclosure crisis, and the homeownership rate of our communities remains significantly lower compared with the national average,” said Lisa Hasegawa, Executive Director of the National Coalition for Asian Pacific American Community Development. “The CFPB’s announcement of a broad definition of Qualified Mortgage will ensure that more families can afford homeownership and will help communities and future generations rebuild their wealth.”

The National Urban League ( is a historic civil rights organization dedicated to economic empowerment in order to elevate the standard of living in historically underserved urban communities. Founded in 1910 and headquartered in New York City, the National Urban League spearheads the efforts of its local affiliates through the development of direct service programs; and through the public policy research and advocacy activities of the National Urban League Policy Institute in Washington, D.C. Today, there are nearly 100 local Urban League affiliates in 36 states and the District of Columbia, providing direct services that impact and improve the lives of more than two million people nationwide.

The National Coalition for Asian Pacific American Community Development (National CAPACD) was founded in 1999 with the mission to be a powerful voice for the unique community development needs of AAPI communities and to strengthen the capacity of community‐based organizations to create neighborhoods of hope and opportunity. For more information, visit our website here and follow us on Twitter: @CAPACD.

NCLR—the largest national Hispanic civil rights and advocacy organization in the United States—works to improve opportunities for Hispanic Americans. For more information on NCLR, please visit or follow along on Facebook and Twitter.


Issues: Wealth Building
Geography:California, Far West, Midwest, Northeast, Southeast, Texas