Housing barely made it into the presidential debate Wednesday night. But when it did, Republican candidate Mitt Romney used the opportunity to slam President Obama on the qualified mortgage rule as well as Dodd-Frank as a whole.
While he never mentioned the Consumer Financial Protection Bureau directly, Romney expressed dismay that under the new regulatory scheme, prudential regulators have yet to clearly define all of the terms.
"They never defined what a qualified mortgage is," Romney exclaimed. "It's been two years."
The CFPB officially launched in July 2011 and expects to have the QM rule finished by its January 2013 deadline.
Romney's reference tied directly into the Dodd-Frank regulation that forces the Consumer Financial Protection Bureau to establish a standard for a qualified mortgage as part of an overarching regulatory initiative that requires lenders to determine a borrowers ability to repay a mortgage upfront.
It's still unknown whether lenders will have a safe-harbor provision that protects them from litigation if they follow established ability-to-pay guidelines or if there will be a rebuttable presumption, leaving them more open to potential litigation when "an ability-to-repay" case surfaces.
Romney conceded that some regulation of Wall Street is needed, but criticized Dodd-Frank for creating too-big-to-fail banks and constructing a system that he claims is hurting regional and smaller banks.
President Obama toted Dodd-Frank as a solution designed to ensure all players in the mortgage crisis – from excessive lenders, borrowers and mortgage brokers – are held accountable in the future and blamed the lack of regulatory oversight for the 2008 financial crisis.
Romney has been more aggressive on the housing issue this week. The Republican candidate released a plan that suggested cutting the mortgage interest rate tax deduction as part of his overall tax plan.