St Casimirs Mortgage Minute

Keating: Final ‘Qualified Mortgage’ Standard Ensures Access to Safe Credit

The “qualified mortgage” standard under the ability-to-repay final rule that the Consumer Financial Protection Bureau issued yesterday ensures that most consumers will continue to have access to safe credit, ABA President and CEO Frank Keating said.

“Qualified mortgage, as defined by the rule, imposes strict lending standards. While QM encompasses many of the loans being underwritten today, it must also interact with a number of other mortgage rules that the CFPB will be issuing this month,” Keating said. “There is a very real impact to these rules, and they will transform our lending practices and could restrict access to credit.”

He commended the bureau for recognizing the need for a safe harbor to prevent a reduction in credit availability and unwarranted lawsuits that ultimately would drive up the cost of loans for consumers.

“We appreciate the thought, time and work the CFPB put into developing this rule. It is clear that the bureau has implemented tough consumer protections with an eye toward limiting market disruptions,” Keating said. “ABA will continue to work with the CFPB to achieve a strong housing recovery.”

The ability-to-repay final rule will take effect on Jan. 10, 2014.
--ABA Daily Newsbytes