September 16, 2019

Submitted electronically at regulations.gov
Comment Intake
ATR/QM ANPR
Bureau of Consumer Financial Protection
1700 G Street, NW
Washington, DC 20552

Re: Response to ANPR on the Qualified Mortgage Definition under the Truth in Lending Act (Docket No. CFPB-2019-0039 or RIN 3170-AA98)

Dear Madam or Sir,

SIFMA1 is pleased to respond to the CFPB’s ANPR on the qualified mortgage definition. We welcome that CFPB has chosen a two-step approach to address this important issue – first, issuing an ANPR to elicit views from market participants and other stakeholders, and then following that with an NPR outlining specific regulatory proposals. This process should provide maximum opportunity for the Bureau to consider its options.

SIFMA recognizes the central role that the QM Patch has played in mortgage lending in recent years, as well as the importance of moving forward with a review of the CFPB’s 2013 rules. As CFPB acknowledges, the current framework for QM and its associated income verification requirements are deficient, and it is appropriate for CFPB to take this time to revise and improve upon them as the sunset of the Patch approaches.

We write this letter on behalf of our broker-dealer and asset manager members who are active in the secondary markets for mortgage loans, as buyers and sellers of whole loans, underwriters and issuers of securitizations, and buyers and sellers of mortgage-backed securities.

Bright Line Standards

Regardless of the path the CFPB chooses, SIFMA members believe that the regulations must make it very clear what is a QM, what is not a QM, and what is the path to achieve that QM status. This is important because non-QM loans create additional liability for holders of those loans. Assignee liability, as a general matter, has a chilling effect on the willingness of the secondary markets to fund credit creation.

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1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).