NAFCU Survey: Most CUs Will Reduce or Discontinue Non-QM Mortgages
Eighty-eight percent of respondents to a NAFCU survey say their credit unions will reduce originating mortgage products that don’t conform to the Consumer Financial Protection Bureau’s “qualified mortgage” standard, or discontinue the products altogether.
The survey was published Wednesday in the trade’s May Economic and CU Monitor newsletter and asked participants a variety of questions regarding how CFPB rules have impacted their operations.
Forty-four percent of respondents said they will reduce their originations of non-QM mortgages, while the other half said they would cease non-QM originations completely. The CFPB’s qualified mortgage rule will take effect Jan. 10. The Federal Housing Finance Agency announced May 6 it will cease purchasing non-QM mortgage loans on the rule’s effective date.
Additionally, the survey found that 37.5% of respondents originated mortgages in 2012 that would not meet the rule’s criteria. Fifty-one percent said they will have to revise their periodic billing statements under the rule, and 18% said the rule’s 120-day waiting period for loss mitigation actions conflicts with a state regulation.
An overwhelming majority of 93% of respondents said they have seen regulatory burdens rise under the statute, and 88% cite increased compliance costs.
In the absence of Dodd-Frank Act regulatory and compliance burdens, 71% said they would be able to offer lower fees to members and 58% said they could offer more services or enhance existing ones.
Of the 76.2% of responding credit unions that service mortgages, most said their set-up costs under the CFPB rule will come in under $10,000; however, 11.5% say they expect initial set-up to cost more than $50,000, and 7% expect ongoing costs to exceed $50,000.