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On United Front, Group Seeks Mortgage Answers from CFPB

reversemortgagedaily.comApr 24, 2012

By Elizabeth Ecker

An extensive group of more than 30 different associations, consumer and civil rights advocates, lenders and others came together this week in a letter to Consumer Financial Protection Bureau chief Richard Cordray imploring the CFPB to broadly define the term “qualified mortgage,” or “QM,” as part of the CFPB’s pending Ability to Repay regulation.

Formerly having had oversight over Ability to Repay, the Federal Reserve Board transferred authority over the rule to the CFPB last year.

Now, industry groups have expressed concern that a QM too narrow could have harmful effects on the housing recovery.

“A broadly defined Qualified Mortgage (QM) rule that includes a safe harbor from meritless lawsuits is essential to preserving credit availability and supporting the housing recovery,” said Frank Keating, president and CEO of the American Bankers Association, one of the groups to sign the letter.

The danger of a narrow rule, the letter states, is potentially ruling out many low- and moderate-income borrowers.

“A narrow rule would limit borrowers’ options, restrict credit availability, and undermine the housing recovery,” it says.

Additionally, inclusion of a safe harbor is essential, the groups say.

“Without a safe harbor, lenders will operate well inside the Qualified Mortgage boundary to reduce litigation risk. The result will be restricted credit availability.The alternative—a rebuttable presumption—lacks any real protections and opens banks up to wide litigation risk. This uncertainty will make borrowing more expensive and credit less available. Some lenders may leave the market altogether.

Those signing the letter include the ABA, Mortgage Bankers Association, National Association of Mortgage Bankers (NAMB), American Securitization Forum, National Association of Realtors and The Appraisal Institute, among others.

“Our primary concern is for the overall health of the national economy,” said John H. P. Hudson, Government Affairs Committee chairman of NAMB. “If the ‘qualified mortgage’ is too narrowly defined with items that really do not measure a consumer’s ability-to-repay, then consumers will simply not have access to credit which will further perpetuate the economic woes this country faces.”

Back to April 2012 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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