Reviewing the qualified mortgage (QM) rule handed down by the Consumer Financial Protection Bureau (CFPB), the Dept. of Housing and Urban Development (HUD), in trying to broaden access to Federal Housing Administration (FHA)-insured loans, may modify the safe harbor provision, as nationalmortgagenews informs MHProNews. Any interest rate that exceeds the average prime rate plus 150 basis points falls outside the QM safe harbor line, which opens the door for possible litigation against the lender if the borrower defaults. FHA has announced it will issue its own QM rule as allowed under Dodd-Frank.

(Image credit: Federal Housing Administration)