Academic journal article ABA Banking Journal

Dodd-Frank Rules Continue to Restrict Mortgage Lending: ABA Survey

Academic journal article ABA Banking Journal

Dodd-Frank Rules Continue to Restrict Mortgage Lending: ABA Survey

Article excerpt

Ninety percent of the typical bank's mortgage loans made last year were "qualified mortgages," according to ABA's 22nd annual Real Estate Lending Survey.

The survey revealed that nearly 80 percent of respondents expect the Consumer Financial Protection Bureau's mortgage lending rules will continue to cause a reduction in credit availability with 19 percent characterizing the impact as severe.

"As expected, the ability-to-repay and QM rules have dampened the housing market recovery," says ABA EVP Bob Davis. "Combine that with new mortgage disclosures, which are just around the corner, and we'll continue to see a slowdown in what should be the ideal time to buy a home."

The most likely reason for a mortgage loan not meeting QM standards was high debt-to-income levels followed by lack of required documentation.

Despite these setbacks, bankers can boast some positive results. The 182 respondents, 77 percent with assets less than $1 billion, reported the highest percentage of loans to first-time homebuyers in the survey's 22-year history. …

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