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TH E M R EP O RT | 61 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION QM Rule Crimping Credit Unions The ever-expanding cost of mortgage lending is too burdensome for many to bear, NAFCU contends. T he Consumer Financial Protection Bureau's (CFPB) ability-to-repay/ qualified mortgage rule (QM) is making business difficult for credit unions, according to a letter issued by Ann Kossachev, Regulatory Affairs Counsel for the National Association of Federally-Insured Credit Unions (NAFCU), in August. The NAFCU's members say they are "troubled by the growing cost of mortgage lending" due to the rule. According to Kossachev's letter, the CFPB's QM rule has become a financial burden to credit unions—one that's made it hard to adequately serve American homebuyers. "The rule has forced some credit unions to increase their staff and has constrained their capacity to provide nonconform- ing loans, which has hurt credit unions' ability to provide financial services to the underserved populations that need it most," Kossachev wrote. "The CFPB's failure to recognize the unique structure of credit unions and tailor regulations accordingly has caused significantly higher compliance costs for credit unions across the country." According to Kossachev, the rule has even forced some credit unions to cease operation. "In response to the rule, some credit unions have been forced to stop their mortgage oper- ations altogether because they could not afford to take on the significantly higher compliance burden," she wrote. "Others simply stopped offering non-QM loans or greatly reduced their origination of nonconforming loans." Kossachev also provided a few sugges- tions for revising the rule, including mak- ing the temporary GSE-qualified mortgage category permanent and modifying the debt-to-income threshold. "Now is the time for the CFPB to re-evaluate the logic behind its arbitrary 43 percent DTI threshold," she wrote. "NAFCU requests the CFPB increase this DTI threshold to at least 45 percent, but preferably 50 percent, to align with Fannie Mae's new standard and allow credit unions greater flexibility to serve low- and moderate-income individuals." In the letter, Kossachev also suggests modi- fying the points and fees system, which is "confusing and unnecessarily complex." Copyright © 2017 Mortgage Cadence, LLC. All rights reserved. To be the very best means partnering with a leading mortgage technology solutions provider. With true one-stop shop mortgage technology, you'll have the most reliable software and dedicated people constantly by your side, powering your future every step of the way. Powered by S E P T E M B E R 2 0 T H , 2 0 1 7 P R O U D S U P P O R TE R