The Mortgage Bankers Association sent a letter to the Federal Housing Administration Friday, asking the agency to treat all FHA-insured loans as Qualified Mortgages with the heightened safe-harbor legal standard attached.

"MBA strongly believes that if the HUD QM rule is finalized correctly, it will foster sound and sustainable FHA-insured mortgage financing for consumers," explained MBA senior vice president of public policy and industry relations Stephen O'Connor. 

The distinction between the FHA QM safe harbor and the FHA QM rebuttable presumption loans for FHA-insured loans should be eliminated for various reasons, including the fact that the distinction is unnecessary under this government program, MBA said.

Additionally, establishing this dichotomy will add significant regulatory burden. Consequently, if the higher priced FHA-insured loans carry a rebuttable presumption, they will be costlier if it's available at all, MBA argued. 

If HUD seeks to move forward with implementation at the start of the new year, MBA believes all FHA-insured loans should be treated as QM safe harbor mortgages early on.

However, if HUD chooses to maintain a rebuttable presumption, the basis for rebutting it should be revised, the trade group claims.

Click here to read the letter in its entirety. 

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