Lenders ready for QM, Cordray claims

by Ryan Smith13 Sep 2013

Mortgage lenders are prepared for the January implementation of a new underwriting rule, the director of the Consumer Financial Protection Bureau told Congress Thursday, according to a Bloomberg report.

Speaking at a hearing of the House Financial Services Committee, CFPB head Richard Cordray said that most lenders would be ready to follow the so-called qualified mortgage rule, which requires that lenders take steps to confirm that a borrower will be able to repay a mortgage.

“Most of the institutions have told us that they will be in compliance,” Cordray said.
The qualified mortgage rule will apply to both banks that originate mortgages and nonbank lenders, Bloomberg reported.

While many smaller lenders have said that implementation of the rule would drive them out of the mortgage industry, Cordray told Congress that there were exemptions that could apply in those cases. “It would be a bad business decision if they left that money on the table and did not make those loans,” he said.

COMMENTS

  • by Mike Beerling | 9/13/2013 9:10:12 AM

    This guy is spinning the story. NO way any investors are ready for this. Ask them, I have them in my office weekly and not one says they are ready. I dont want to call him a liar, but he is definitely confussed.

  • by Licensed mortgage pro | 9/16/2013 7:34:08 AM

    Nearly all mortgages for sale to Fannie/Freddie done since Sept of 2007 (yes 6 years ago) would be a QM mortgage. Non QM mortgages disappeared back then when the melt down was in full stride. Loans need full documentation for the past 6 years. It is essentially a non event. A way for politicians to make themselves sound good, without actually having any clue what they are doing. You can only do these mortgages if the borrower has the ability to repay in 2014 how is that any different than current practice?

  • by Richard Ellis | 9/21/2013 6:08:42 AM

    Richard Cordray was speaking to a House committee to assure them the concerns their constitutents have are all unfounded. He was saying to Congress "If you get a call from a mortgage professional about the QM rules, they are part of a tiny minority because the majority of the industry is ready. They must be stupid. Pay them no mind."

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