ABA and 53 state bankers associations urged Congress to pass legislation (H.R. 1210) that would deem all mortgage loans that institutions originate and hold in portfolio as “qualified mortgages” for purposes of the ability-to-repay rule’s safe harbor provisions. The House is expected to vote on the bill this week.
“Portfolio lending is among the most traditional and lowest risk lending in which a bank can engage,” the groups wrote, noting that the bank carries all the credit and interest rate risk. They added that existing mortgage rules, especially the QM standards, “are overly restrictive and have made it difficult and in some cases impossible for banks to make these otherwise safe and sound loans to creditworthy borrowers.”