Housing News Podcast: Former FHFA Interim Director Ed Demarco on QM and the Ability-to-Repay rule
The Housing News Podcast is a weekly wrap of the top news stories by HousingWire CEO Clayton Collins.
Each week, HousingWire interviews financial services experts who can help make sense of the latest headlines, sponsored by our partners at Arch MI.
This week, Housing Policy Council President and former Federal Housing Finance Agency Interim Director Ed DeMarco visits HousingWire to talk about the latest developments on the Qualified Mortgage and the Ability-to-Repay rule.
DeMarco talks about the shifts in the QM rule, and what it would mean to remove the debt-to-income requirement from the QM definition and why this makes sense.. Is the pricing threshold a better option, or could it be better used to determine what isn’t QM, instead of what is? DeMarco explains the difference, and what his take on it is.
And hold out until the end, when we shift the conversation slightly to GSE reform, and what it means to have someone like FHFA Director Mark Calabria at the helm as Fannie Mae and Freddie Mac prepare to exit conservatorship.
Here’s more detail on the topics of discussion this week:
Consumer Financial Protection Bureau Director Kathy Kraninger recently sent a letter to Congress informing them of her intention to remove the DTI requirement from the ATR rule. This all comes as the QM Patch is set to expire in early 2021. Regulators are now being forced to look at the rule and determine what they will do next, but did say to expect an extension of the QM Patch as they work out the final details on the DTI requirement.
DeMarco discussed what options lie before the CFPB as it moves away from the DTI requirement. Will the CFPB consider adding to the existing QM requirements a pricing threshold that would render some otherwise QM mortgages to be non-QM? DeMarco explains what this might mean.
He also talked about the plan to end the conservatorship for Fannie Mae and Freddie Mac. The bottom line – If FHFA Director Mark Calabria says he’s going to get the GSEs out of conservatorship, we should take him seriously.
And here are links to the topics discussed:
1) What is the Ability-to-Repay rule without DTI
2) Mark Calabria: Fannie Mae and Freddie Mac will increase focus on exiting conservatorship https://www.housingwire.com/articles/mark-calabria-fannie-and-freddie-will-increase-focus-on-exiting-conservatorship/
3) Unleveling the playing field for small lenders and first-time buyers? https://www.housingwire.com/articles/unleveling-the-playing-field-for-small-lenders-and-first-time-buyers/