The Consumer Financial Protection Bureau needs to make the qualified mortgage rule more accommodating when it comes to rural banks and balloon mortgages, according to the
The CFPB has provided a QM exemption for balloon mortgages that are originated by rural banks. But ICBA claims the exemption does not go far enough to ensure access to mortgage credit in rural areas.
A survey by ICBA found that many banks don’t qualify for the exemption because they don’t meet the bureau’s definition of a rural bank.
For respondent community banks that consider themselves to be rural, 44% do not qualify under the rule’s definition.
“ICBA’s survey shows that some Main Street communities could be cut off from a critical source of mortgage credit without adjustments to the CFPB’s new mortgage rules,” said ICBA chairman, and president and CEO Bill Loving.
ICBA suggests several changes to improve the QM rule. One suggestion calls for expanding the definition of “rural” for balloon mortgage loans to include all counties outside metropolitan statistical areas and all towns with fewer than 50,000 residents.
