Qualified Mortgage Concerns Abound Before House Panel
Jerry Reed, chief lending officer from the $5.3 billion Alaska USA FCU, told lawmakers during a June 18 hearing on the Consumer Financial Protection Bureau’s qualified mortgage rule that products and product features were responsible for the mortgage market meltdown, not underwriting standards.
In addressing a question from Rep. Patrick McHenry (R-N.C.), who asked how credit unions can lend with high loan-to-value ratios yet suffer few loan losses, Reed said borrowers defaulted during the financial crisis because they were steered into inappropriate loan products.
“Mortgage lending can be a highly subjective business, especially in rural and underserved areas. This element of relationship-based decision-making is completely ignored by the premise of the rule. It will be nearly impossible for the CFPB to endlessly amend the rule to accommodate the ability of lenders to make these relationship-based loans. Unfortunately, the end result will be some consumers losing access to credit and the ability to own their own home,” Capito said.
James Gardill, chairman of the board of the $6 billion WesBanco Inc., told the subcommittee that a charitable program administered by his bank to help low-income families buy homes is threatened by the Dodd-Frank rules.