Obama, Romney Spar on Mortgage Rules

Obama, Romney Spar on Mortgage Rules

Mortgage rules being drafted by federal banking regulators came under the spotlight last night in the first election debate between President Barack Obama and his Republican challenger, former Massachusetts Gov. Mitt Romney.

The President defended provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010, as necessary to prevent a repeat of the loose lending practices that resulted in the country’s financial crisis in 2007. “Does anybody out there think that the big problem we had is that there was too much oversight and regulation of Wall Street?” Obama said midway through the 90-minute debate.

Gov. Romney cited the qualified mortgage (QM) rule as a key example of the problems Dodd-Frank has created in the mortgage market, because the law left it unclear what a qualified mortgage looks like. That has created confusion among lenders, hurting mortgage availability to consumers.

The qualified mortgage rule is intended to ensure lenders make loans only to borrowers who can demonstrate a reasonable ability to repay them. NAR's position is that the definition should be broad, rather than prescriptive, so lenders can make safe, affordable mortgages to all creditworthy borrowers, not just those with the strongest credit profiles.

The candidates’ discussion of the QM rule was the only time housing came up in the debate. They also sparred over a broad range of domestic issues, including the economy, taxation, the federal deficit, health care, energy, and education.

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