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Monday, August 6, 2012

Senators Advocate for Broad QM, Safe Harbor

Three senators in a letter Friday urged CFPB Director Richard Cordray to include a broad definition of “qualified mortgage” -- and a true legal safe harbor for conforming loans -- in the bureau’s pending ability-to-repay rule.

Sens. Roy Blunt (R-Mo.), Jerry Moran (R-Kan.) and Mark Begich (D-Alaska) wrote:
If the ultimate definition of a QM is excessively narrow, otherwise creditworthy borrowers could find themselves unable to obtain affordable mortgage credit.
The senators said a safe harbor also would prevent an unnecessary restriction of credit due to legal confusion or cost.
As the Federal Reserve correctly stated in its preamble to the draft rule, the ‘drawback of treating a qualified mortgage as providing a presumption of compliance is that it provides little legal certainty for the creditor, and thus little incentive to make a qualified mortgage.
ABA agrees with the lawmakers and will continue its aggressively advocacy -- which has included meetings with the CFPB, appeals to lawmakers, testimony, letters and coalition building -- for a broad QM that includes a safe harbor.

Read the letter.

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