Loan Officers Say ATR/QM Rules Make Mortgage Approvals More Difficult

Around 34% of all loan officers responding to a Fed survey indicated the CFPB’s Ability-to-Repay and Qualified Mortgage Standards under the Truth in Lending Act (the ATR/QM rule) makes it more difficult to get conforming mortgage loans approved. The “more difficult” response rate rises to about 49% for loan officers from smaller banks for borrowers that have FICO scores of less than 680. By “more difficult” we mean references in the survey that the approval rate is “somewhat lower” to “much lower.”

About 57% of loan officers responded that approval was more difficult for prime residential mortgages with principal balances greater than the conforming loan limits announced by the FHFA.

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