Credit Unions Plan on Scaling Back non-QM Mortgages

Nearly half of members responding to a NationalrnAssociation of Federal Credit Unions survey say they are already planning to droprnloans from their product line that do not meet Qualified Mortgage (QM)rnguidelines.  Members were asked about arnrange of impacts anticipated under new Dodd-Frank Act rules being implementedrnby the Consumer Financial Protection Bureau in a survey conducted for the May Economic and CU Monitor.</p

Respondents said they were getting arnhead start on complying with the new Ability-to-Repay/QM mortgage rule.  A large majority, 92.9 percent, said theyrnhave seen regulatory burdens rise under the rule and 88.1 percent reportedrnincreasing compliance costs.</p

If the regulatory and compliance issuesrnunder Dodd-Frank did not exist, 71.1 percent of the respondents said they couldrnoffer lower fees to members and 57.9 percent said they could offer morernservices or better ones.</p

In addition to the 44 percent who saidrnthey plan to stop originating non-QM loans altogether, another 44 percent saidrnthey intend to reduce the numbers of those loans.  Over a third said that they had originatedrnloans in 2012 that would not comply with the new rule.</p

Of the 76 percent of respondents whornsaid they service loans most said their set-up costs under the CFPB rules willrnbe under $10,000 but 11.5 percent estimated set up costs at over $50,000 andrn7.1 percent expect ongoing costs to exceed that amount.

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