CFPB’s QM rule turning borrowers away: NAFCU witness
by. Nicholas Ballasy
Daniel Weickenand, CEO of the $531 million Orion Federal Credit Union in Memphis, Tenn., told Congress Tuesday the CFPB’s new qualified mortgage standards will cause his credit union to turn away many creditworthy borrowers.
“In today’s lending environment, with interest rates at record lows, margins on non-QM loans will be very narrow,” he said in his written testimony before a House Financial Services subcommittee. “When you take into account the additional legal liability associated with non-QM loans, this margin will be even narrower. While some institutions may start charging a premium on their loans to account for the additional risk associated with non-QMs, we do not feel this is in the best interest of our credit union, our members and our community.”
Consequently, Weickenand said Orion FCU has decided to not offer non-QM loans.
“I cannot tell you how difficult this decision has been. Orion takes great care in placing our members with the right mortgage product, and the QM standard will inevitably force us to turn many creditworthy borrowers away,” he added.
The title of the hearing, which began at 10 a.m. Eastern Time in the Rayburn House office building, was “How Prospective and Current Homeowners Will Be Harmed by the CFPB’s Qualified Mortgage Rule.” Weickenand appeared as a witness on behalf of NAFCU. Other witnesses include a community banker and the CEO of Quicken Loans.continue reading »