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Posts Tagged ‘qm’

CFPB Director Cordray Grilled at House Financial Services Committee Hearing

January 28th, 2014 Comments off

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray received criticism during a hearing Tue., Jan 28 from the Chairman of the House Financial Services Committee, Jeb Hensarling, (R-TX), who said his committee is already hearing negative feedback from consumers regarding the Qualified Mortgage rule which went into effect Jan. 10. While QM has been well received in some mortgage circles, like the Mortgage Bankers Association (MBA), Rep. Steve Pearce says manufactured housing (MH) has been left out of the equation, and that 50 percent of the houses in New Mexico are manufactured homes.

Noting that most of the lenders have quit dealing with manufactured homes altogether in NM, and 25 percent have quit lending to the housing market totally, he told Cordray, “In your attempt to protect the small guys, you are limiting access to credit.”

Cordray acknowledged the importance of MH to a certain segment of the population, that it presents special difficulties because of issues pertaining to the land on which the home is located, but that small lenders and credit unions can continue to make loans that historically have been successful. “In terms of lending, they have carte blanche, because we trust them on the lending they do,” Cordray said. He added the agency will continue to analyze data and adjust rules based on that information, according to mninews.com.

The CFPB is also working with the Federal Housing Finance Agency (FHFA) to collect data on millions of mortgages to streamline the system, MHProNews.com has learned. Rep. Ed Royce, noting Target’s security breach in Dec., expressed concern about collecting credit information on 50 million people. Rep. Sean Duffy said, “I am specifically interested in testimony in regard to the data collection at the CFPB, specifically the extent of the information that is being collected on the American people and to the extent of the disclosure you get to collect and monitor on their financial transactions.” Saying there is already a lot of information available in the homeowner market, Cordray said, “In order to make judgments and to get it right we have to get information to get it right.”

(Photo credits: above, Rep. Jeb Hensarling, wikipedia; below, Richard Cordray, abcnews)

Effects of Qualified Mortgage Rule Discussed Two Days in

January 13th, 2014 Comments off

The House Financial Services Committee (HFSC) will hold a hearing Tuesday morning, Jan. 14, 2014, on the effects of the Qualified Mortgage rule that became law two days before the scheduled session. HSFC Chairman Jeb Hensarling (R-TX) has long opposed the Dodd-Frank Act, saying the regulations unduly tighten credit for borrowers. He would do away with the government-sponsored enterprises (GSEs), MHProNews has learned, saying they keep out private lenders, which would be a better regulator of lending standards. The Subcommittee on Financial Institutions and Consumer Credit’s hearing, entitled “How Prospective and Current Homeowners Will Be Harmed by the CFPB’s Qualified Mortgage Rule,” will feature representatives from the Independent Community Bankers of America, the Mortgage Bankers Association (MBA), and the National Association of Federal Credit Unions (NAFCU), according to housingwire.com.

(Image credit: House Financial Services Committee)

Barnes blasts blackest comedy of Dodd-Frank, signals retreat toward “common sense”

September 2nd, 2013 Comments off

tight-credit-shutter-stock-inman-posted-daily-business-news-manufactured-housing-professional-news-mhpronews-com-Writing in Inman, mortgage broker Lou Barnes laments that “six years after mortgage misbehavior stopped cold, we still do not have a national understanding of what happened, laboring in ignorance, score-settling, and the entirely successful effort by Wall Street investment bankers to dodge accountability.” Barnes notes that, “Pre-bubble, every mortgage bank and broker was contractually obliged to repurchase any loan with deficient underwriting, whether it defaulted or not.” and that, “The Wall Street banks did not just buy bad loans 2000-2007; they designed and vacuumed them.” The broker lampoons, “The containment of QM/QRM damage is not an easing of currently overly tight standards, just turning away from more tightening. In blackest comedy, the regulators cited as a principal reason to retreat that credit is already far too tight.” Lobbing a few Tomahawks, Barnes says, will only cause a pause in the rate adjustments. What will make a difference for mortgages? “Six regulators agreed that the central mortgage provisions of Dodd-Frank are bad ideas.” ##

(Image credit: Inman/Shutterstock)

 

Cordray: QM Rule Should not Always Apply

May 16th, 2013 Comments off

Responding to what are perceived as carved-in-stone strictures, Consumer Financial Protection Bureau (CFPB) director Richard Cordray says regardless of the agency’s QM Rule with its highly-defined rules, lenders should feel safe originating loans that have exhibited strong performance over time, as nationalmortgagenews tells MHProNews. Noting community banks and credit unions have long made good loans, in a speech to the National Association of Realtors (NAR) he says, “Nothing about their traditional lending model has changed, and they should continue to offer such mortgages to borrowers whom they evaluate as posing reasonable credit risk—whether or not they meet the criteria to be classified as qualified mortgages.”

(image credit: andyenstallblog)

 

Are Loans Unsafe Outside QM?

April 18th, 2013 Comments off

According to nationalmortgagenews, bankers were relieved when the Consumer Financial Protection Bureau (CFPB) released its qualified mortgage rule (QM) in January, which gives the lender protection if a borrower defaults. But now some bank executives are hesitant to make loans outside the QM rule, and worry they could be rapped on the knuckles if they do not. In testimony before a House Financial Services subcommittee (financial institutions), Ken Burgess of First Bancshares of Texas says the risk is too high outside the QM rule, and his bank will no longer offer those loans. Other bankers noted tighter credit standards make it tougher to meet the Community Reinvestment Act requirements, which is lending to less creditworthy borrowers. Charles Kim of Commerce Bancshares representing the Consumers Bankers Association, says, “There’s a continual friction between safety and soundness regulation and then the need to make loans in underserved markets.” MHProNews has learned the panelists support a bill in both houses of Congress to create an independent appeals procedure for bank examinations.

(Image credit: foreclosuelistings)

Romney Baits Obama with QM

October 5th, 2012 Comments off

In his take on the presidential debate Wed. night, Paul Muolo of OriginationNews notes Romney peppering Obama about the Qualified Mortgage rule that awaits finalization by the Consumer Financial Protective Bureau. MHProNews has learned Muolo finds it impressive that Romney knows what a QM is, and suggests Obama likely does not, although he compliments Obama for having learned the difference between loan brokers and loan officers. Since Obama criticized loan officers for writing mortgages for unqualified applicants, Muolo asks, somewhat rhetorically, if this means he has recognized that loan officers at discredited lending institutions are responsible for their role in the mortgage mess.

(Image credit: HousingWire)