Ed DeMarco, the President of the Housing Policy Council (HPC), made the following statement today in response to the Consumer Financial Protection Bureau’s (CFPB) efforts to clarify the Ability-to-Repay/Qualified Mortgage rule (ATR/QM Rule), which describes the minimum standards that must be used to determine that consumers have the ability to repay mortgages they are extended.
“The Housing Policy Council welcomes CFPB’s announcement of its intent to engage the public in amending its ATR/QM rule. The temporary GSE Patch was never intended to be a permanent solution and we are pleased CFPB is preparing for its end. By itself, a borrower’s debt-to-income is a poor indicator of a borrower’s ability to repay and both the numerator and denominator are very hard to define in regulation. We look forward to the public comment process leading to a simplification of the rule without this distortive element that has limited credit availability and consumer choice without enhancing risk assessments. HPC also appreciates Director Kraninger’s statement that CFPB wants to ensure a “smooth and orderly transition” through this rulemaking process."