Impending QM rule not the end of the world, say originators

by Ryan Smith17 Dec 2013
With implementation of the Consumer Financial Protection Bureau’s qualified mortgage rule inching ever closer, some originators are worrying about how the new regulation will affect their business. Some, however, say they’re not too concerned.

Marc Jalbert, branch manager of Colonial National Mortgage in Boulder, Colo., said he didn’t think his business would suffer too much under the new rules.

“It’s going to hurt a little bit, I think … but it’s really not an issue for our core market here,” Jalbert said. “We tend to do higher priced loans here. It really impacts markets that tend to do smaller loan sizes, so I don’t think that component of it is going to be egregious – but it could affect some people’s ability to qualify.”

Jalbert said his company has been preparing to implement the new rules for a long time.

“We’re having to retool a lot of systems,” he said. “We’re already well ahead of the curve. We’ve already had days of training. We look at it as a competitive advantage to some degree – just being ready to go.”

“I really don’t see it affecting anything with me other than some additional paperwork,” said John Marcoline, branch manager at FBC Mortgage in Crafton, Pa. “…We have pretty decent customers around here. My average credit score around here is 714. I see the random loan here and there maybe being affected … but I’m getting agency qualified mortgages anyway. (There will be issues with) maybe one or two loans a year out of 300.”

Michael Deery, president of Citywide Financial in San Diego, Calif., was also sanguine about the QM rules.

“This one, I think is not a big deal once you look under the hood of the car,” Deery said. “It probably will hurt $100,000 or $150,000 loans a little bit, but down here in Southern California I don’t think we’ll miss a beat. … Will it constrict my business? Yes it will, but what do you do? You adapt and move on.”

Deery also thought smaller companies would have an easier time with compliance.

“Brokers have always been able to adapt really fast to new rules, whereas if you’re with a large company there’s just a lot to change when it comes to compliance,” he said. “Being small means being able to adapt. The lenders we work with aren’t monsters like Wells Fargo or Bank of America, they’re smaller wholesalers with excellent customer service. I don’t think we’re going to skip a beat on conventional loans or FHA or VA loans.”

Despite his confidence, Deery still questions the necessity of the QM rule.

“The market has self-corrected, like it always does. I think this last QM rule is a bunch of nonsense,” he said. “It’s unnecessary. The crisis happened in 2008, right, and this is just now happening. They’re a little late to the party. The market has corrected itself.”


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