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Monday, April 16, 2012

ABA, Trade Groups Urge Broad 'Qualified Mortgage'

ABA and a coalition of 32 lender, realtor, consumer and civil rights groups on Friday urged the CFBP to include a broadly defined "qualified mortgage" -- or QM --designation as part of its Dodd-Frank Act mandated ability-to-repay final rule.

In a letter to CFPB Director Richard Cordray the trade groups said:
[A]n unnecessarily narrow definition of QM that covers only a modest proportion of loan products and underwriting standards, and serves only a small proportion of borrowers, would undermine prospects for a housing recovery and threaten the redevelopment of a sound mortgage market.
The trade groups noted that Congress intended that all creditworthy borrowers -- especially low- and moderate-income borrowers and families of color -- should be extended the important protections of a QM.
Creating a broad QM, which includes sound underwriting requirements, excludes risky loan features, and gives lenders and investors reasonable protection against undue litigation risk, will help ensure revival of the home lending market.
Read the letter.

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