Are Qualified Mortgage Changes on the Horizon?
On Wednesday, November 18, the House of Representatives voted to alter the definition of Qualified Mortgage. Despite the White House having previously stated that such a bill would face a veto if it reached the White House, the House of Representatives voted to push the bill through anyways.
The White House claims that by passing this bill into law would be putting consumers back in risky situations when it comes to obtaining mortgage loans. Changing the Qualified Mortgage rules would remove many of the protections put in place to avoid risky lending behavior by exempting financial institutions from Qualified Mortgage standards.
The other side argues in favor of the bill saying Qualified Mortgage rules actually make it harder to lend to qualified borrowers. Generally speaking only the safest loans are held in portfolio by lenders, so making these loans exempt from Qualified Mortgage rules would not negatively affect borrowers or lenders. The House of Representatives claims changing Qualified Mortgage rules would give borrowers great access to the lowest risk mortgage products and ultimately open up mortgage loans to a greater number of qualified borrowers.
Sides have been split for years over whether the CFPB and Dodd-Frank are the problems or the solutions to the economic crash. This bill brings that argument front and center as the debate rages on as to how to keep the economy on a path to stability. Would a bill like this help or hurt the economy and borrowers more?