No DTI CAPS- What could go wrong?

By | September 11, 2019

Well, the insanity continues.

HousingWire is reporting that a coalition of  lenders and trade groups are calling on the CFPB to eliminate the debt to income cap on all Qualified Mortgages.   Yes, you read that right. lenders want to eliminate the debt to income cap to allow more loans to be originated. They claim by using alternative factors to determine risks, more low income borrowers can obtain a mortgage.

Mortgage Bankers Association President and CEO Robert Broeksmit stated:

“With respect to the 43% DTI threshold, it makes little sense to commit to a rigid requirement that does not account for the complexities of underwriting. Instead, we should focus on alternatives, like permitting the use of compensating factors or implementing a residual income test,” Broeksmit wrote. “Allowing for this flexibility will ensure that lower-income borrowers and minorities are better able to participate in the home-buying process, without introducing undue risk to the system.”

The group petitioning the CFPB includes Bank of America, Quicken Loans, Wells Fargo, Caliber Home Loans, Mortgage Bankers Association, American Bankers Association and the National Fair Housing Alliance.

Lets take a step back; We have eliminated appraisals with the use of Property Waivers to remove the burden of the any appraisal issues; we allow Joe, Uber driver to collect property information and give that information to an appraiser across the country to complete the appraisal with spoon fed data; and now they want to remove the cap on the amount of debt a borrower can have.

This is not going to end well. 

It’s just a suggestion! 

As most of you know, VaCAP President, Pat Turner has applied for a position on the Appraisal Standards Board.  We obviously believe Pat is an excellent choice and support him whole heartily.  Well,  It has come to our attention, Phil Crawford, Voice of Appraisal has gotten wind of Pat’s application. In true Phil Crawford fashion, Phil has taken things to a new level…..



Yes, Phil Crawford, Voice of Appraisal is selling official ” Pat Turner Suggestion”  T-Shirts to support the Appraiser Cancer Relief Fund as discussed on his latest podcast. Listen to Voice of Appraisal E232  and order your suggestion shirt here. 


Thank You for Being Part of VaCAP! 

One thought on “No DTI CAPS- What could go wrong?

  1. BB

    ….and they will probably succeed in getting their way when you look at the firepower of the names advocating the move.

    As I continue to say we and “they” approach the critical issues from two completely opposite angles. It’s apples and oranges. Our positions center upon safety & soundness concerns….that is not anywhere in their periscope’s view. Their positions, with blinders on, is about unleashing business in epic proportions, and explosion of growth & income with money floating out of the sky like loose tree leaves on a windy fall day….that is not our focal point. The Trump doctrine is characterized much more by the “unleashing business” model, softening regulations and removing restrictions that “encumber’ businesses from experiencing a profit explosion. And history has shown us that the “unleashing an explosion of profit” model works. Essentially the tsunami of money raining down like rain drops in a thunderstorm can outrun the downside. That’s true and it works……..FOR AWHILE. But eventually at some point the house of cards comes tumbling down, then those involved run like rats from a sinking ship…..with a pocket full of cash. Those who don’t get off the ship in time simply await a bailout.

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