Financial institutions have been implementing new regulations through board-approved policies for decades. As existing regulations are revised and new regulations are published existing polices need to be updated. Policy Updates are designed to simplify the task of updating existing policies, regardless of where the existing requirement is lodged. The Consumer Financial Protection Bureau (CFPB) released a rule that clarifies that where a successor-in-interest (successor) who has previously acquired title to a dwelling agrees to be added as obligor or substituted for the existing obligor on a consumer credit transaction secured by that dwelling, the creditor’s written acknowledgement of the successor as obligor is not subject to the Ability-to-Repay Rule (ATR Rule), § 1026.43, because such a transaction does not constitute an assumption as defined by Regulation Z. The Ability-to-Repay – Successor-in-Interest Policy Update communicates the Board’s intent to comply with the successor-in-interest’s ability to repay a refinancing or assumption of a closed-end consumer credit transaction secured by a dwelling.
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