©Center for Responsible Lending, 2014 1

Qualified Mortgage Rule Benefits the Housing Market

(Comments by Mortgage Industry Organizations and Experts,

Community Advocates, and Lawmakers)

(Emphasis in quotes added by CRL) January 2014

“These rules offer protection for consumers and a clear, safe environment for banks to do business.

Now everybody knows if you stay inside these lines, you are safe.”

David Stevens, Chief Executive of the Mortgage Bankers Association1

“…we are pleased that the rule encompasses the vast majority of the safe, high quality lending being

done today…[and] believe today’s QM rule is a positive step to bringing certainty to the housing

finance system.”

National Association of Realtors2

“Under the approach adopted by the CFPB for QM loans, lenders are required to engage in prudent

underwriting practices and eliminate higher risk features…As a result, loans meeting the QM definition

will be well-underwritten, safe and sound, high-quality loans.”

American Bankers Association3

“Setting the rules and boundaries for consumer mortgage loans is one of the first steps needed to

encourage more private capital investment in the housing finance system...[and] the new rules provide

a foundation to build investor trust in the system over time.”

CoreLogic4

“As of November [2013], the average debt-to-income ratio for completed conforming mortgages was

41% versus the 43% mandated by the CFPB's [qualified mortgage] rule…we anticipate implementation

and a live evaluation of the rules may widen mortgage availability as originators learn the boundaries

of the new strictures."

Sterne Agee investment firm5

©Center for Responsible Lending, 2014 2

1 Edward Wyatt. “U.S. Consumer Watchdog to Issue Mortgage Rules” New York Times, January 10, 2013. Available

at http://www.nytimes.com/2013/01/10/business/consumers-win-some-mortgage-safety-in-new-rules.html?_r=0. 2 NAR Statement on the Qualified Mortgage Rule. January 11, 2013. Available at http://www.realtor.org/news-

releases/2013/01/nar-statement-on-the-qualified-mortgage-rule 3 American Bankers Association comment letter to joint regulators re: Credit Risk Retention Proposed Rule.

October 30, 2013. Available at http://www.aba.com/Advocacy/commentletters/Documents/ABACommentsCreditRiskRetentionProposedRule.pdf 4 Faith Swartz and Margarita Brose. “ATR/QM: Foundation for a Sound Housing Market.” Core Logic White Paper,

October 2013. Available at http://www.corelogic.com/research/atr-qm-white-paper/17-atrqrstds-1013-00-atr-qm-standards_foundation-for-a-sound-housing-market-final-102513.pdf CoreLogic is a leading provider of analytics and research on real estate, housing, insurance, and capital markets. 5 Shanti Bharatwaj. “Will It Be Easier to Get a Mortgage In 2014?” The Street, January 3, 2014. Available at

http://www.thestreet.com/story/12202555/1/will-it-be-easier-to-get-a-mortgage-in-2014.html 6 Congressional Record, October 10, 2013. http://beta.congress.gov/congressional-record/2013/10/10/senate-

section/article/S7357-6 7 “Qualified Mortgages: Examining the Impact of the Ability to Repay Rule.” Hearing before the House Financial

Services Committe, May 21, 2013. http://financialservices.house.gov/uploadedfiles/113-22.pdf 8 “New CFPB Mortgage Rule Improves Protections for Minority Homebuyers.” Press statement by National Council

of La Raza, January 10, 2013. Available at http://www.nclr.org/index.php/about_us/news/news_releases/new_cfpb_mortgage_rule_improves_protections_for_minority_homebuyers/ 9 Id.

“By requiring good underwriting [through the QM rule] we are ensuring a robust housing market,

robust and available capital through Freddie Mac, Fannie Mae, and private institutions, to ensure

housing in America can return to the heights it has known in the past.”

Senator Johnny Isakson (R-GA)6

"The CFPB in my opinion has worked diligently to write a fair and balanced rule that followed the intent

Congress laid out for responsible home lending."

Representative Carolyn Maloney (D-NY) 7

“Greater numbers of Latinos will become first-time homeowners in the years to come, helping both the

economic mobility of their families and the prosperity of our nation as a whole. We commend CFPB for

adopting a broad definition of a Qualified Mortgage, which will foster an inclusive housing market for

Hispanic families just starting out."

Janet Murguía, President and CEO of National Council of La Raza8

“The homeownership rate of our [Asian American, Native Hawaiian and Pacific Islander] communities

remains significantly lower compared with the national average…a broad definition of Qualified

Mortgage will ensure that more families can afford homeownership and will help communities and

future generations rebuild their wealth."

Lisa Hasegawa, National Coalition for Asian Pacific American Community Development 9