ABA, along with an extensive coalition of trade associations, housing and consumer advocates, and community groups, today urged the CFPB to craft a QM rule that encompasses a wide range of mortgage products and underwriting practices to protect credit availability.
This broad coalition ranging from consumer and community groups to the financial services sector agrees that an unnecessarily narrow rule would put the possibility of a mortgage out of reach for many low- and moderate-income borrowers. A narrow rule would limit borrowers’ options, restrict credit availability, and undermine the housing recovery.While a broad QM rule advocated for in this letter is essential, it is workable only with the protections of a safe harbor.
Without a safe harbor, lenders will operate well inside the Qualified Mortgage boundary to reduce litigation risk. The result will be restricted credit availability.The alternative – a rebuttable presumption – lacks any real protections and opens banks up to wide litigation risk. This uncertainty will make borrowing more expensive and credit less available. Some lenders may leave the market altogether.
Thoughtful regulation that preserves flexibility and protects credit availability can be achieved through a broad Qualified Mortgage rule that includes a safe harbor.
Read the joint trade group's letter to the CFPB.