Lenders Want to Eliminate DTI Cap!
No DTI CAPS – What could go wrong?
Well, the insanity continues.
HousingWire is reporting that a coalition of lenders and trade groups are calling on the CFPB to eliminate the debt to income cap on all qualified mortgages. Yes, you read that right. Lenders want to eliminate the debt to income cap to allow more loans to be originated. They claim by using alternative factors to determine risks, more low income borrowers can obtain a mortgage.
Mortgage Bankers Association President and CEO Robert Broeksmit stated:
With respect to the 43% DTI threshold, it makes little sense to commit to a rigid requirement that does not account for the complexities of underwriting. Instead, we should focus on alternatives, like permitting the use of compensating factors or implementing a residual income test,” Broeksmit wrote. “Allowing for this flexibility will ensure that lower-income borrowers and minorities are better able to participate in the home-buying process, without introducing undue risk to the system.”
The group petitioning the CFPB includes Bank of America, Quicken Loans, Wells Fargo, Caliber Home Loans, Mortgage Bankers Association, American Bankers Association and the National Fair Housing Alliance.
Let’s take a step back; We have eliminated appraisals with the use of Property Waivers to remove the burden of the any appraisal issues; we allow Joe, Uber driver to collect property information and give that information to an appraiser across the country to complete the appraisal with spoon fed data; and now they want to remove the cap on the amount of debt a borrower can have.
This is not going to end well.
It’s just a suggestion!
As most of you know, VaCAP President, Pat Turner has applied for a position on the Appraisal Standards Board. We obviously believe Pat is an excellent choice and support him whole heartily. Well, it has come to our attention, Phil Crawford, Voice of Appraisal has gotten wind of Pat’s application. In true Phil Crawford fashion, Phil has taken things to a new level…
Yes, Phil Crawford, Voice of Appraisal is selling official “Pat Turner Suggestion” T-shirts to support the Appraiser Cancer Relief Fund as discussed on his latest podcast. Listen to Voice of Appraisal E232 and order your suggestion shirt here.