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SFA: Industry SRO Can Help Define ATR Standards for Mortgages and Reduce Costs

On September 8, 2020 SFA responded to the CFPB’s NPRM on the General QM definition in which SFA laid out a proposal for an industry Self-Regulating Organization (SRO) and explained how the SRO can allow for innovation while establishing and maintaining safeguards for borrowers and investors.

article by Structured Finance Association

On Tuesday September 8, SFA submitted a response to the CFPB’s NPRM on the proposed General Qualified Mortgage (QM) definition. SFA had previously responded to the CFPB’s ANPR on the topic of QM and Ability to Repay (ATR), and this NPRM response builds off our previous efforts. SFA also submitted a response to the CFPB on extending the QM Patch past its currently-scheduled expiration date of January 2021. SFA members have a wide range of views on the proposed use of pricing to determine whether a loan is a QM. Notably, SFA members have divergent views on the use of the spread between the APR of a particular loan and the Average Prime Offer Rate (APOR) as a means of determining whether that loan receives the regulatory benefit of being a QM, which provides safe harbor from subsequent ATR claims and defenses.

Given the divergence of our members’ views, SFA has convened representatives from across the industry to form an ATR Task Force to determine whether and how the industry can fulfill the statutory mandates that gave rise to the ATR/QM regulatory regime, while providing dynamism and innovation within the mortgage space. SFA’s ATR Task Force is chaired by industry leaders who are highly renowned and deeply involved at every stage of the securitization process in both the QM and non-QM markets.

If you are interested in learning more about the letter or joining the SFA ATR Task Force, please contact Dallin Merrill (

Click here to read SFA’s response to the CFPB NPRM on General QM Definition