Consumers, lenders feel sting of new mortgage rule

The qualified mortgage (QM) rule was implemented in January of 2014. It is the first of two rules that came from the Dodd-Frank Wall Street Reform and Consumer Protection Act that will impact the housing market.

The law is intended to protect consumers by strengthening underwriting standards, but some have argued that the rules will raise costs and reduce access for consumers. In addition, consumers need to have rock-solid evidence of their income, employment and resources.

To gain insight on the impact of the new law, the National Association of Realtors research department surveyed a sample of lenders with questions about the impact of the lending on their business and how the rule could in turn impact consumers.

When asked about the extent of the QM rule’s impact, 55 percent of survey respondents indicated that the QM rule would affect 2.6 percent to 20 percent of their originations. However, 20 percent of originators surveyed indicated that the changes and heightened underwriting in general would impact nearly all of their production.