- The nation's largest retail banks - WFC, BAC, C, and JPM - all expect to originate mortgages beginning in January falling outside of the standards mandated by Washington. To review, Dodd-Frank doesn't prohibit mortgages not meeting the definition of a so-called qualified mortgage (as defined by the CFPB), but banks can face greater legal liability on those loans.
- The impact of the new rules has yet to be seen, but the worry is they would curtail lending at the exact time when it ought to be encouraged. At this point, the bank's lending outside of these standards looks like it will be mostly to affluent customers (jumbo mortgages), and not a large proportion of total activity. Wells estimates about 5% of its lending this year wouldn't fall within QM guidelines.
- Wells' EVP of home mortgages Brad Blackwell: "It's clear the borrowers we're lending to today have an ability to repay ... We don't see a significant reason to contract our lending...because these are very high-quality borrowers."
- Deutsche estimates 13% of jumbo loans made since 2010 wouldn't be "qualified" mortgages.
Banks expect to make mortgages outside of new standard
Dec 3 2013, 11:13 ET