The Bureau of Consumer Financial Protection (BCFP) hosted the first of several industry meetings this week examining the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM) in anticipation of their five-year assessment of the rule, due in early 2019. The Bureau previously issued a request for information (RFI) on the rule, which NAR submitted comments, and the meeting was a chance for industry groups to provide updates on those comments.
The discussion largely focused on how to address the QM patch, set to sunset when the conservatorship ends and no later than January 10, 2021, and flexibility with Appendix Q standards, debt-to-income ratio calculations, and points and fees calculations. There was general consensus around the importance of such issue standards, but with reasonable considerations to adjust for varying factors.
A great part of the discussion also highlighted the need for flexibility for creditors when it comes to self-employed income, which includes a large majority of NAR’s members and is increasing due to the rise in gig economy workers. Such flexibility, such as through residual income testing, would ensure that Appendix Q underwriting guidelines are not inadvertently leaving these borrowers with less options than salaried employees.
NAR will continue to advocate for and support changes to the rule that ensure broad mortgage liquidity and availability.