MADISON, Wis. – Credit unions have less than two weeks to make their voices heard regarding a rule that could have a large impact on their ability to offer mortgages to their members.
The comment period for the Qualified Mortgage Rule has been extended to Aug. 1. According to Joel Luebkeman, director of marketing and product development for CMG Mortgage Insurance Company, it is important for credit unions to let regulators hear how well their high loan-to-value ratio loans are performing. The FDIC has proposed a rule that would require, among other provisions, a 20% cash down payment on a purchase mortgage and no 60-day delinquencies on any debt in the past 24 months.
“To get an idea of the scale of transactions that would be affected by the QRM rule, it is estimated 2.7 million borrowers in 2010, or 40% of home loans, would not have met the QRM definition,” said Luebkeman. “The proposed rule penalizes credit unions for doing the right thing. Credit unions have delinquency rates that are a fraction of those of banks. Credit unions were responsible in their loan-to-value lending.”
Luebkeman spoke on a Webinar Monday that was hosted by CUNA Mutual Group. The Webinar, “Update on Proposed Qualified Residential Mortgages (QRM) Rules: Why Credit Unions Should Care,” featured Mary Dunn, SVP and deputy general counsel for CUNA, Steve Robertson, managing director, PricewaterhouseCoopers, and John McKechnie, SVP for Total Spectrum.
