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Rep. Berg Joins 107 House Members Seeking QM Safe Harbor

Posted on 7/17/2012

House Financial Services Financial Institutions Subcommittee Chairman Shelley Moore Capito (R-WV), Rep. Brad Sherman (D-CA), and 106 additional House Members, including Rep. Rick Berg, wrote to the Consumer Financial Protection Bureau (CFPB) yesterday to make clear that the pending Qualified Mortgage (QM) proposal should include a safe harbor.

"We believe that the final rule must structure the QM as a strong legal safe harbor, not a rebuttable presumption," they wrote. "Both could still be challenged in court. However, as the Federal Reserve correctly stated in its preamble to the rule, the ‘drawback of treating a "qualified mortgage" as providing a presumption of compliance is that it provides little legal certainty for the creditor, and thus little incentive to make a "qualified mortgage," which limits loan fees and features.'

"Because of the strict and costly penalties associated with loans that don't meet the ability to repay requirements, lenders are highly unlikely to originate loans that don't meet the QM definition. This could lead to a restriction of credit accessibility for borrowers."

To read the letter visit: http://www.aba.com/Issues/Grassroots/Documents/QM-CapitoSafeHarborLetter-071612.pdf


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