MBA Sends CFPB Letter on GSE Loan Limits

MBA sent a second letter to the CFPB last week, alerting the Bureau to the effect that FHFA action to lower loan limits could have on the QM rule and access to credit.  The QM rule contains two primary qualification methods — with one path requiring a 43 percent or lower DTI ratio and the other temporary method being contingent on eligibility for GSE or government agency purchase or guarantee. The letter pointed out that should FHFA lower loan limits, many borrowers that could have qualified for safe and sustainable loans through the GSE route may not be eligible under the 43 percent DTI standard and thus could be unable to get a QM loan. MBA’s letter asked the CFPB to address this problem by changing the requirements to allow loans approved under GSE standards to be QMs whether or not they are eligible for purchase or guarantee based on the loan amount. MBA also asked that going forward the CFPB develop a permanent solution to ensure that credit worthy jumbo borrowers can still have access to QM credit.