52-group coalition urges alignment of QM, QRM
Oct. 31, 2013 – NAFCU is part of a coalition of 52 consumer organizations, lenders and other groups to urge several major agencies to support a re-proposed rule to align the definitions of a qualified mortgage and a qualified residential mortgage.
The Coalition for Sensible Housing Policy, in its request, praised the proposal by the six agencies to revise the definitions, saying: “This approach achieves the twin objectives of protecting the marketplace while ensuring borrowers have access to safe mortgages. Investors will remain confident they can rely on the quality of mortgages underlying securitizations and creditworthy borrowers will be able to obtain access to conventional financing for safe, sustainable mortgages.” The agencies modified their original Credit Risk Retention rule.
However, the coalition added that it “strongly opposes the alternative ‘QM-Plus’ approach” in the same rule, saying it would require borrowers to make a 30 percent down payment in order to get a QRM loan, which would make mortgage credit unattainable for many borrowers who are actually creditworthy. The group contends that the underwriting and loan product limitations already mandated for QM loans are effective in limiting default risk without excluding worthy borrowers. The letter included data and graphs showing why the QM-plus approach is harmful, and in particular noted the number of years it takes potential buyers to save for a down payment of varying amounts, depending on their profession and race.
The coalition also includes among its members the Mortgage Bankers Association, the National Association of Realtors, Habitat for Humanity International and the Independent Community Bankers of America, among others. Their letter was sent to the Federal Reserve, FDIC, Federal Housing Finance Agency, Securities and Exchange Commission, Department of Housing and Urban Development and Office of the Comptroller of the Currency.
Coalition for Sensible Housing Policy white paper