New rules about how banks give out mortgages could harm consumers and the housing marketing recovery.
In a letter to the director of the Consumer Financial Protection Bureau, which is writing the rules, about three dozen consumer, banking, and home owner advocacy groups urged the CFPB to write the rules so that creditworthy consumers can still get mortgages.
The rules define what’s a “qualified mortgage” or QM. Loans that don’t qualify as QMs will be difficult to get or more expensive than QMs.
The QM rule is supposed to protect consumers against risky loan products and ensure banks only give mortgages to consumers who can repay their loans.
“It’s critical for home owners and the housing recovery that there be a balance between inadvertently exposing consumers to risky mortgages and denying or delaying creditworthy borrowers from achieving the dream of sustainable home ownership,” said NATIONAL ASSOCIATION OF REALTORS® President Moe Veissi.
The list of groups that wrote to the CFPB includes Habitat for Humanity, the National Council of State Housing Agencies, and the Mortgage Bankers Association.