Mortgage Bankers Association Letter to the Federal Reserve RE “Skin in the Game” and the Ability of Borrowers to Repay

The MBA believes this proposal and the Credit Risk Retention/Qualified Residential Mortgage
(QRM) rule, to which we are responding in a separate comment letter, are the two most
significant mortgage-related rules required by Dodd-Frank concerning mortgage lending. How these rules are finalized will determine who has access to affordable mortgage financing for generations to come.

Please do not hold us accountable for pushing predatory loans! First, if you make the originators keep some “skin in the game” the mortgage market and global economy will be destroyed!

Second, you can’t possibly expect lenders to lend to people who can actually pay the loan back do you?

Dodd-Frank and this proposal prohibit lenders from making a mortgage loan unless the
originator makes a reasonable determination, in good faith, based on verified and documented
information at the time the loan is consummated that the consumer has a reasonable ability to repay the loan, including all applicable taxes, insurance and assessments.

MBA has long supported establishment of an ability to repay requirement for mortgage loans.
However, since the requirement will apply broadly and bring considerable liability to lenders and assignees for any violations, it is essential that the rule’s QM requirements include
unambiguous definitions and means of compliance. Clear “bright line” requirements will ensure the provision of sustainable mortgage credit to the widest array of qualified borrowers at affordable costs.

If these requirements are implemented incorrectly, however, we are deeply concerned that far too many borrowers will be excluded from affordable mortgage credit and/or will be subject to unreasonably increased financing costs, in turn harming the very people Dodd-Frank was intended to protect and undermining the nation’s economic recovery.

Actual letter below…

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4closureFraud.org

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MBA Ability to Repay Comment Letter