WASHINGTON, July 26 — The National Community Reinvestment Coalition, an organization that works to uphold fair housing, fair lending and consumer protection laws, issued the following statement by CEO Jesse Van Tol:
The Consumer Finance Protection Bureau (CFPB) yesterday released an Advanced Notice of Proposed Rulemaking signaling the end to the so-called “GSE Patch” which allows Fannie Mae and Freddie Mac to back mortgage loans to borrowers that exceed the 43% cap on debt-to-income – a cap included in the CFPB’s Qualified Mortgage rules. Lenders that originate loans in compliance with CFPB’s Qualified Mortgage/Ability to Repay (QM/ATR) standards are protected from future lawsuits.
“Since the financial crisis, the CFPB’s QM rules have helped ensure that the nation’s financial institutions provide low- and moderate-income (LMI) families with prudent and sustainable mortgage loans. The GSE Patch has allowed Fannie Mae and Freddie Mac to back loans to many first-time home buyers, minority borrowers and rural families that simply would not have been able to buy a home otherwise.
“We are concerned that the CFPB is eliminating the only viable path to homeownership for many LMI borrowers that have had the toughest time accessing mortgage credit since the crisis – homeownership that has helped generations of working-class Americans build wealth over time.