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Lending

Paul Ryan: We will try to get QM delayed

Community banks in his home state say they will stop lending

October 29, 2013
KEYWORDS CFPB / healthcare / Paul Ryan / QM
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Paul Ryan, the Republican congressman from Wisconsin and former vice presidential candidate, doesn't mince his words. Actually, discussing the nation's economy is more important to him than eating.

Let me explain.

Not ten minutes after I watched Paul Ryan debate the Obama administration's troubled launch of healthcare.gov with Health and Human Services Secretary Kathleen Sebelius on CNN, Ryan strode into a lunch with roughly 30 of the nation's lenders.

No one from the too-big-to-fails were there, but rather many of the mid- to larger non banks were in representation. The lunch, put together at the Capitol Hill Club by DocuTech and Stearns Lending, gave Ryan a chance to do what he could to reassure these creditors that he intends to fight burdensome regulations.

He took particular pause when discussing the Consumer Financial Protection Bureau's plans for the qualified mortgage rule and safe harbor. This is a man who wasn't just briefed on an issue; he knows his stuff.

"In my state, up to 75% of mortgages won't qualify under QM," he said, pushing his unfinished salad aside and grabbing a pack of Sweet'N Low for his iced tea. "Community banks, they all think they'll get sued."

Later on he would add, "we'll try to get it delayed," but considering the history of negotiations with the administration over health care and the government shutdown, few believe such an effort would be successful. After the lunch, some felt Ryan's estimation of 75% was way too high and placed for dramatic impact.

At any rate, the issue Ryan had with the QM is that it offers a standardization of credit, locking his state's smaller lenders into a box.

"Community bankers customize credit," he said. The QM would make mortgages punitive, only bigger entities could afford the capital to lend, the whole thing amplifies too-big-to-fail, he said. Further, the CFPB operates without Congressional oversight, which Ryan called unconstitutional, but likely just to push his point. Earlier efforts to change the oversight of the CFPB met with failure and Ryan didn't say they might try it again.

Earlier in the day, George W. and Jeb Bush spoke at the MBA convention underway a short distance from Capitol Hill. The elder bush cracked jokes and worked the crowd well. He closed with the notion that Jeb would run for President in 2016. Ryan was more noncommittal when pressed.

"I'm just trying to get through [this term] first," he said.
 

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