Eighty percent of lenders said they are making only Qualified Mortgage loans or waiting to see before entering the non-QM market, according to a Fannie Mae survey released yesterday. On balance, lenders expected to tighten credit standards. Thirty-six percent said the QM rule would induce them to tighten, while only 6 percent said they expected to ease standards.
The CFPB’s mortgage rules are also raising costs, the survey showed. Nearly three-quarters of lenders reported higher operational expenses due to the QM rule, and 85 percent said their spending on quality control has risen in the previous year.
The survey results are similar to an informal survey ABIA conducted of our members this summer. Based on ABIA member responses, most concerns were centered around uncertainty of how and when premiums and fees for homeowners insurance are included in the points and fees calculation for purposes of determining whether a mortgage is a Qualified Mortgage (QM) under the CFPB Rule. In response, ABIA's outside counsels prepared an ABIA members-only memo and compliance article regarding the inclusion of homeowners insurance in the QM Points and fees rule.
In addition, Fannie’s survey results correspond to the results of ABA’s Real Estate Lending Survey this spring, which found that more than 80 percent of bankers expect that CFPB’s mortgage rules to constrict mortgage credit and that 64 percent expected to restrict their mortgage lending to QMs or to non-QM loans in targeted markets only.
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