U.S. FHA to Propose Own Version of Consumer Bureau Mortgage Rule

Feb. 28 (Bloomberg) -- The Federal Housing Administration will propose its own rule requiring lenders to confirm a borrower’s ability to repay a mortgage, an agency spokesman said today.

Premium increases and other fee changes scheduled to go into effect April 1 could push the cost of FHA loans above the threshold for the safest loans as defined in a rule issued by the Consumer Financial Protection Bureau in January.

The 2010 Dodd-Frank financial-regulation overhaul allows FHA to propose its own version of the so-called Qualified Mortgage rule, which defines abusive lending and offers legal protections to lenders who issue loans without high fees and other risky features.

“We’re undertaking that process and will publish a proposed rule for comment in the near future,” Brian Sullivan, an FHA spokesman, said in a statement. The agency’s action was reported earlier by National Mortgage News.

To contact the reporter on this story: Clea Benson in Washington at cbenson20@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net