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.

Topics:  Ability-to-Repay, Banking Sector, Banks, CFPB, FHFA, Mortgages, Qualified Mortgage Rule, Truth in Lending Act

Published In: Consumer Protection Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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