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MBA Files Comment on Proposed Ability to Repay/Qualified Mortgage Rule

WASHINGTON, D.C. – July 26, 2011 – (RealEstateRama) — On Friday, the Mortgage Bankers Association (MBA) filed a comment letter with the Federal Reserve on the Board’s proposed rule that would implement amendments to the Truth in Lending Act (TILA) under the Dodd-Frank Act to establish Ability to Repay/Qualified Mortgage requirements.In the letter, MBA’s President and CEO David H. Stevens reiterates MBA’s support for the establishment of an ability to repay requirement for mortgage loans and emphasizes the importance of a final rule that provides unambiguous definitions and means of compliance.  According to MBA, clear “bright line” requirements will ensure the availability of sustainable mortgage credit to the widest array of qualified borrowers at affordable costs.

MBA strongly believes that any final rule must:

1. Structure the QM as a legal safe harbor with specific product features, documentation and underwriting requirements that may be more extensive than the requirements proposed in order to ensure the availability of sustainable, affordable mortgage credit to the widest array of qualified mortgage borrowers;
2. Significantly adjust the limit on points and fees in the QM alternatives proposed to ensure the availability of credit and address several other major concerns; and
3. Provide a well-defined QM safe harbor that will serve as an alternative to the proposed QRM. The right QM definition will incentivize the origination of sustainable mortgages and, thus, serve the interests of investors as well as borrowers and invite private capital back to the market.


The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: