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Newly Published Qualified Mortgage Rule Strikes Good Balance

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Newly Published Qualified Mortgage Rule Strikes Good Balance

Today's photos are those of Archival Designs' Luxury House Plan, Maxwell Court.

On Jan. 10, the Consumer Financial Protection Bureau (CFPB) released its final Ability-to-Repay/Qualified Mortgage (QM) rule as required by the 2010 Dodd-Frank Act. The intent of this rule is to create broad-based changes to how creditors make loans and include new ability-to-repay requirements to ensure consumers are able to repay their mortgage over the long term. NAHB’s housing policy experts are combing through the document and will provide an in-depth analysis on NAHB.org soon.

However, the initial consensus is that the final rule appears to be quite workable for both industry stakeholders and consumer groups. In fact, it addresses many NAHB and industry concerns about the need for a broad QM definition and a safe harbor that will provide a solid foundation for lenders to provide consumer access to affordable credit. In an official NAHB statement released the day that the rule was made public,

Chairman Barry Rutenberg praised the CFPB’s efforts and said: “The qualified mortgage rule stipulates that borrowers must be able to repay home loans issued to them and will set the parameters for all mortgage financing going forward. So it is essential that it strikes the proper balance that encourages lenders to provide creditworthy borrowers access to affordable home loans, and also gives assurances to financial institutions that they will be protected from lawsuits if they meet the criteria set forth in the rules. Our initial review of the QM rule indicates that this balanced approach can be achieved. NAHB is encouraged that regulators heeded concerns from the housing industry to craft a broad standard that includes many of today’s sound mortgage products, including fixed-rate and adjustable-rate mortgages, under the QM standard.”

Further Lumber Design Value Changes Back on the Table

The Southern Pine Inspection Bureau (SPIB) recently resubmitted to the American Lumber Standard Committee’s (ALSC) Board of Review proposed lumber design values for the remaining grades and species of visually-graded Southern Pine lumber. NAHB representatives will be in attendance when these changes are considered at the Board of Review's next meeting on Jan. 30. SPIB withdrew its original submission in order to review and respond to comments from the U.S. Forest Products Laboratory (FPL). The new submission addresses the FPL comments and makes minor revisions to the previously-submitted values. For Southern Pine other than #2 2x4 and associated sizes and grades, SPIB’s submission proposes changes in lumber design values of -10% to -30% for bending, -10% to -15% for compression parallel to grain, -150 psi to an increase of 200 psi for tension and -200,000 psi to no change for modulus of elasticity.

For #2 2x4 and associated sizes and grades, the SPIB’s new submission amends the design values approved early in 2012. The previous design values are increased 5% to 10% for bending, 0% to 5% for tension, 20% to 40% for compression parallel to grain, and 0 to 100,000 psi for modulus of elasticity. If approved, these new design values would affect floor joist, floor truss, roof rafter and header spans -- meaning that house plans may need to be adjusted going forward.  NAHB will request that an appropriate effective date be selected that allows time for an orderly transition in order to avoid project delays and market disruptions.

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  • Joanne Loftus
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