Moody’s Analytics Chief Economist Mark Zandi said regulators should give lenders a legal safe harbor under the upcoming qualified mortgage rule, according to his op-ed in The Washington Post Friday.
“(L)enders should be given legal safe-harbor protection, making it difficult for borrowers who receive qualified mortgages to sue,” Zandi wrote. “The risk that this will allow too many bad mortgages to be made is meaningfully smaller than the risk that, without such protection, many more good mortgages will not be made.”
A legal safe harbor would give lenders protection in their foreclosure cases as long as the guidelines under the QM rule are met. The rebuttable presumption clause would give more borrowers the ability to submit evidence in court that a lender knowingly made an unaffordable mortgage using information rule makers can’t anticipate now.
Industry trade groups and homeowner advocates both agree the rule should not constrict mortgage credit, but both sparred recently in Congress over whether a safe harbor is necessary for that. Zandi appears to side with the industry based on his piece in the Post.
The Consumer Financial Protection Bureau is scheduled to finalize the QM rule in January 2013.