WASHINGTON, DC – April 18, 2012 – (RealEstateRama) — “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.
ABA, along with an extensive coalition of trade associations, housing and consumer advocates, and community groups, today urged the CFPB to craft a Qualified Mortgage rule that encompasses a wide range of mortgage products and underwriting practices to protect credit availability.
“This broad coalition ranging from consumer and community groups to the financial services sector agrees that an unnecessarily narrow rule would put the possibility of a mortgage out of reach for many low- and moderate-income borrowers,” said Keating. “A narrow rule would limit borrowers’ options, restrict credit availability, and undermine the housing recovery.”
While a broad Qualified Mortgage rule advocated for in this letter is essential, it is workable only with the protections of a safe harbor. “Without a safe harbor, lenders will operate well inside the Qualified Mortgage boundary to reduce litigation risk. The result will be restricted credit availability,” said Keating.
“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,” said Keating.
“Thoughtful regulation that preserves flexibility and protects credit availability can be achieved through a broad Qualified Mortgage rule that includes a safe harbor,” he said.
The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its two million employees. The majority of ABA’s members are banks with less than $185 million in assets. Learn more at aba.com
ABA Media Contact: Ryan Zagone
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