MBA: Rewrite The QM Rule


MBA: Rewrite The QM Rule The Mortgage Bankers Association (MBA) has renewed its calls to broaden the Qualified Mortgage (QM) rule in order to prevent potential borrowers from being shut out of the housing market.

In remarks delivered yesterday before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, MBA Chairwoman-Elect Debra Still warned that the QM rule had the ‘potential to significantly alter the landscape of homeownership.’ She urged the Consumer Financial Protection Bureau (CFPB) not to define QM in an excessively restrictive manner.

‘It is critical that the CFPB structures the definition of a 'Qualified Mortgage' such that credit qualification parameters do not become even more conservative than they already are,’ Still said. ‘The MBA believes the QM definition must be defined broadly so that all qualified borrowers enjoy access to safe and affordable mortgage credit. It is our strong opinion that setting overly tight credit parameters will hurt middle-class homebuyers. This is contrary to the spirit of Dodd-Frank and could also jeopardize the fragile housing recovery.

‘For the rule to be effective, lenders must know how to comply,’ she continued. ‘Clear and unambiguous standards and a strong legal safe harbor are essential for a vibrant mortgage market in the future."

Still added that the safe harbor aspect of the QM rule was ‘misnamed,’ noting that it was ‘neither a pass for lenders, nor does it deprive consumers of an opportunity for court review. Under a safe harbor, a borrower may opt to go to court and seek review of an alleged violation. The issue is how extensive and expensive the legal proceedings will be – uncertain and unbounded legal exposure runs counter to the availability of affordable credit to qualified borrowers.’

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