Heeding the call of some of the largest mortgage lenders in the industry, the Consumer Financial Protection Bureau (CFPB) is moving to back the elimination of debt-to-income (DTI) requirements in mortgage underwriting, Bankrate.com reported. In a letter CFPB Director Kathy Kraninger sent to Congress yesterday, the CFPB asked to amend the Ability to Repay/Qualified Mortgage rule (ATR/QM rule) in order to remove DTI as a qualifying factor in mortgage underwriting. This rule was created in response to the financial crisis of a decade ago as a way to prevent lending money to borrowers who might not be able to afford the loan. The ATR/QM rules includes eight separate borrower qualifications that lenders must examine when approving a loan. The rule includes things like verification of income, credit history and DTI, among others. The only portion the CFPB is asking to amend is the DTI requirement as a powerful coalition of lenders deems the rule unfair and constraining.
