Bankers estimate that well over half of their loan production falls under the Consumer Financial Protection Bureau’s new “qualified mortgage” rule, according to ABA Center for Regulatory Compliance survey.
The data shows 42% of bankers estimate that more than 80% of their current mortgage production would qualify as some form of QM, with 17% of bankers believe anywhere between 66% and 80% of their mortgage production would meet QM standards. On the other hand, 13% of bankers estimate the figures to be between 50% and 65%.
Only 27% say it is less than 50%.
Last month the CFPB unveiled its long-awaited qualified mortgage rule, emphasizing borrowers’ ability-to-repay standards.
The CFPB clarified that are two types of qualified mortgages with different protective features for borrowers, as well as legal consequences for lenders.
The first are higher-priced mortgages that enable borrowers to challenge lenders’ presumption that they have the ability to repay the loans, by proving insufficient income to pay the mortgage.
The second are lower-priced qualified mortgages with a “safe harbor status” given to borrowers considered to be less risky. Under these types of QMs, borrowers can legally challenge their lender if they believe the loan does not meet the CFPB’s definition of a qualified mortgage.
Written by Jason Oliva