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CUNA Offers FHA Safe Harbor QM Threshold Alternative
WASHINGTON (10/31/13)--The Credit Union National Association supported some aspects of the U.S. Department of Housing and Urban Development's (HUD) proposed Federal Housing Administration Safe Harbor Qualified Mortgage (QM) Threshold definition, but also offered changes to clarify parts of the proposal, in a comment letter filed this week.

In the letter, CUNA Associate General Counsel Jared Ihrig said CUNA generally supports HUD's proposed QM definition. However, Ihrig said, the definition does not clearly state how lenders would combine the annual mortgage insurance premium (MIP) with 1.15% to calculate the proposed FHA Safe Harbor QM threshold. CUNA suggested the agency adopt a simpler approach that uses a single percentage point amount, while still taking the MIP into consideration. This would be similar to the Consumer Financial Protection Bureau's approach, Ihrig wrote.

The letter also addressed streamlined refinancings and debt-to-income ratios, among other items.

For the full CUNA comment letter, use the resource link.

HUD is required under the Dodd-Frank Act to issue its own QM rule, separate from the one issued earlier this year by the CFPB.

Once finalized, HUD's QM rule will replace the CFPB's QM definition for FHA loans or certain other HUD insured loans. HUD expects to finalize and have its QM rule become effective on Jan. 10, at the same time as the CFPB's QM rule takes effect.
Other Resources

CUNA Comment Letter
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