WASHINGTON, DC – January 11, 2012 – (RealEstateRama) — The CFPB’s final Ability to Repay/Qualified Mortgage regulation will be a defining force for all mortgage lending. The Roundtable and its Housing Policy Council share the primary goal of the rule to ensure that borrowers have the ability to repay a mortgage loan. We appreciate the open process the Bureau has followed in preparing this rule by engaging all stakeholders in discussions of the rule and its implications.
As the CFPB worked to develop the final rule, we have consistently advocated that the best way to maintain a sufficient flow of mortgage credit to qualified borrowers, to provide clear definitions and a clear safe harbor for mortgages that meet these strong Qualified Mortgage standards.
We are pleased that the rule provides a safe harbor for certain high quality loans, and we are carefully reviewing the details of the new rule. We reserve full judgment until our review is complete.
There are several issues in the regulation that need additional review: we continue to advocate for sufficient transition periods for lenders to comply with these strong new standards, and we understand the rule provides for a one year implementation.
Unfortunately, one year may not be a sufficient period of time to enable institutions to put policies and procedures in place to protect consumers, especially as some parts of the rule are not yet final. We urge the CFPB to review this aspect of the rule and give the industry more time to comply. Also, how the definition of points and fees is calculated in the 3% limit will have an impact on loan cost and mortgage availability. Finally, given the number and importance of mortgage regulations that will soon be issued by CFPB, we urge the Bureau to sequence the effective dates and allow lenders adequate time to implement all of the new regulations.
We look forward to continuing to work with the CFPB to ensure mortgage credit is available to consumers in a safe and sound manner.
The Roundtable’s Housing Policy Council is made up of thirty companies that are among the nation’s leaders in mortgage finance. Member companies originate seventy-five percent of the mortgages for American home buyers. Member companies participate in the Council through the senior mortgage executive in their company.
The Financial Services Roundtable represents 100 integrated financial services companies providing banking, insurance, and investment products and services to the American consumer. Member companies participate through the Chief Executive Officer and other senior executives nominated by the CEO.
Roundtable member companies provide fuel for America’s economic engine, accounting directly for $98.4 trillion in managed assets, $1.1 trillion in revenue, and 2.4 million jobs.
Elise Brooks Perkins