Sept. 17, 2012 – NAFCU and nine other financial trade organizations joined Friday in reiterating their strong support for inclusion of a safe harbor for “qualified” mortgages under a pending Consumer Financial Protection Bureau final rule on borrowers’ ability to repay.
The CFPB proposed an ability-to-repay rule that would provide lenders a rebuttable presumption of compliance with respect to loans meeting the rule’s definition of a qualified mortgage. A rebuttable presumption can be challenged. NAFCU, for its part, has warned that such a rule could discourage many credit unions from continuing to provide mortgage loans.
In Friday’s letter, the trades pointed to the ongoing debate on the CFPB’s ability-to-repay proposal and reiterated their continued, strong support for a qualified mortgage if it meets three requirements:
- The QM must be broadly defined to include the vast majority of very-high-quality loans being originated in today’s market.
- Product, documentation and underwriting requirements must be based on objective, bright line standards.
- Lenders and investors must be granted a clearly defined legal safe harbor from ability to repay litigation when they originate loans that meet the QM standards.
“We believe a broad definition of QM with bright line standards embedded in a legal safe harbor is the only sure means to serve the widest array of qualified borrowers with affordable credit,” they wrote.
They close with a request to meet with Cordray to discuss these issues.
Signing the letter were NAFCU, CUNA, the American Bankers Association, American Financial Services Association, Consumer Bankers Association, Community Mortgage Banking Project, Consumer Mortgage Coalition, Housing Policy Council of The Financial Services Roundtable, Independent Community Bankers of America and Mortgage Bankers Association.