Some aspects of the qualified mortgage rule continue to weigh on the mortgage market. According to NAR’s Survey of Mortgage Originators, despite overtures from the CFPB and modestly fewer issues, lenders tightened some restrictions in the 3rd quarter.
The share of respondents that had issues closing mortgage(s) due to some facet of the qualified mortgage rule (QM) eased from 66.7% in the 2nd quarter to 64.0% in 3rd quarter. Only 20% of the survey respondents indicated not having an issue.
However, the use of buffers increased in the 3rd quarter and was most common on the 3% cap and 43% back-end DTIs requirements with 29.2% and 33.3% of respondents using them, respectively. Some lenders have opted for buffers ahead of the QM parameters to prevent producing a rebuttable presumption or non-QM mortgage.
The CFPB has worked to ease lender concerns and made opportunities for lenders to refund excess fees in certain instances. The increase in concern by lenders could point internal process issues or increased demands from investors.