Agencies seek to clarify approach on QM
Dec. 16, 2013 – NCUA and federal banking agencies on Friday issued a statement clarifying they will not subject a mortgage loan to safety-and-soundness criticism solely based on whether or not it fits the “qualified mortgage” definition under CFPB rules that kick in Jan. 10.
A lender may originate both QM and non-QM loans “based on its business strategy and risk appetite,” the statement says.
It adds: “The agencies continue to expect institutions to underwrite residential mortgage loans in a prudent fashion and address key risk areas in residential mortgage lending, including loan terms, borrower qualification standards, loan-to-value limits, documentation requirements, and portfolio- and risk-management practices, regardless of whether a residential mortgage loan is a Qualified Mortgage or non-Qualified Mortgage.”
The statement was issued by NCUA, FDIC, the Federal Reserve Board and Office of the Comptroller of the Currency.
Regulators' statement on QM