A group of 33 housing industry and community organizations urged the Consumer Financial Protection Bureau to adopt a broader Qualified Mortgage rule, according to a letter sent Monday.
The CFPB inherited the rulemaking authority from the Federal Reserve. The QM rule would effectively establish rules for how lenders determine a borrower’s ability to repay and what liability a bank will hold if it violates the rule.
“A narrowly defined QM would put many of today’s loans and borrowers into the non-QM market, which means that lenders and investors will face a high risk of an ability to pay violation and even a steering violation,” the letter reads.
The CFPB will spend the first half of 2012 finalizing the rule. It’s expected to be issued this summer.
– Jon Prior