The Consumer Financial Protection Bureau (CFPB) published guidance in the Federal Register on Monday cautioning mortgage lenders that a borrower’s immigration or residency status could raise nonrepayment risks under existing mortgage rules.
U.S. citizens and noncitizens with lawful permanent or nonpermanent resident status are eligible for mortgage financing through government-sponsored enterprises Fannie Mae and Freddie Mac. The Federal Housing Administration (FHA) insures home loans under similar conditions but excludes lawful U.S. residents with nonpermanent status.
Within this framework, lenders must comply with ability-to-repay (ATR) rules outlined in the Truth in Lending Act (TILA) and its implementing statute, Regulation Z, of the 20...