Tag Archives: QM

HUD has issued a newly revised definition for Qualified Mortgage (QM) which will affect all Federal Housing Administration (FHA) loans moving forward. The new rule goes into effect January 10, 2014, and will apply to mortgages that are insured, guaranteed, or administered through HUD. The agency's version of QM builds on the existing QM rule finalized by the Consumer Financial Protection Bureau earlier this year.

LoanSifter, a Wisconsin-based company specializing in technology for loan originators and secondary departments, is hosting two industry panels this week to address concerns and strategies revolving around the soon-to-be-implemented qualified mortgage (QM) rule.

As lenders prepare to adopt the Ability-to-Repay and Qualified Mortgage (QM) rules in January, so too are ratings agencies preparing for these new rules. Fitch Ratings released a report revealing its expectations for how the rules will impact future loss severities on residential mortgage-backed securities (RMBS). Overall, Fitch expects the rules to result in greater underwriting uniformity and enhanced due diligence, with 100 percent of reviews completed on all QM and higher-priced QM loans.

When it comes to next year's regulatory obstacles, CEOs and senior executives from the mortgage industry's biggest players agree on one thing: Education will be key to keeping business going smoothly. In a panel at the 2013 Realtors Conference and Expo, high-level names from Quicken Loans, Wells Fargo Home Mortgage, JPMorgan Chase, and Bank of America discussed the qualified mortgage (QM) guidelines, which go into effect in January 2014.

Today's resilient capital market has the capacity to adapt readily to the pending Ability-to-Repay and Qualified Mortgage (QM) rules set to take effect January 10, 2014, according to a white paper issued by CoreLogic. The paper titled, ATR/QM Standards: Foundation for a Sound Housing Market, provides an overview of the rules themselves and examines their possible impact on the market.

The CFPB's mortgage servicing standards--including the Qualified Mortgage (QM) definition and the Ability-to-Repay rule--take effect in less than 90 days. Some bankers have indicated they might limit their offerings to only QM products as the transition is made, and many are concerned that as a result, their operations may run counter to the Equal Credit and Opportunity Act, implemented by the Federal Reserve's Regulation B. Those fears, however, are unfounded, regulators say.

One in five loans originated in today's mortgage market will not meet the requirements of the Consumer Financial Protection Bureau's (CFPB) Qualified Mortgage (QM) rule that goes into effect in January, according to an audit of new loans by ComplianceEase. Of the 20 percent of loans that would not qualify, ComplianceEase determined fee levels would be the disqualifier for about half. The QM rule allows for points and fees of up to 3 percent.

Federal Housing Finance Agency Acting Director Edward DeMarco is deliberating lowering the loan limits for Fannie Mae and Freddie Mac. Congress and the industry, however, are voicing a singular opposition, claiming such action would be detrimental to the housing recovery that is starting to take place across the country. Federal lawmakers and several industry groups sent letters to DeMarco over the past week, some even questioning the legality of such a move.

Speaking at an industry conference in Phoenix, Arizona, this week, Darrin Benhart, the OCC's deputy comptroller for credit and market risk, said the changing regulatory environment requires mortgage lenders to consider a number of potential risks on different fronts. Benhart acknowledged the list of mortgage-related reforms is extensive. ""These reforms mean you will need an even greater emphasis on risk management techniques that not only look at credit risk but also encompass operational and compliance risk,"" he said.

Following the release of the revised Qualified Residential Mortgage (QRM) rule from six federal agencies, several analysts offered insight into how the revisions might benefit or impede progress in the mortgage market. Fitch Ratings believes adopting a QRM standard that mirrors the QM definition will trigger more activity for the jumbo origination and securitization market. Capital Economics, though, noted the QM and QRM proposals aren't much help when it comes to the long-term goal of reducing the presence of the GSEs in the mortgage market.