[A] safe harbor approach to Qualified Mortgages is essential to provide lenders with assurances necessary to originate loans to all credit-worthy borrowers. A rebuttable presumption is largely useless to lenders at the pleadings stage, provides only limited protection at summary judgment or trial stages of litigation, and will reduce credit availability.ABA also explained that the proposal’s bright-line standards are not helpful if they further restrict the current, conservative underwriting standards.
Excluding loans above 43% DTI [debt-to-income] from the Qualified Mortgage definition would unacceptably deny credit to many creditworthy consumers. Bright line standards are desirable only if well-reasoned standards are selected.The letter included survey data showing that imposing a 43% DTI limit would restrict lending by nearly 15%.
Read the full letter.