"It's good for borrowers with good credit, but those with weaker credit who don't fall under the safe harbor provision, lenders could be reluctant to make loans to them," Lebda says.
A lot of that centers around the rebuttable presumption. Although qualified mortgages with rebuttable presumption are priced higher to compensate lenders for the additional risk, the potential for consumers to challenge a lender's determination of ability to pay is an additional risk. That means even with greater regulatory clarity, consumers could still face ultra-tight lending conditions when it comes to residential home loans, Lebda says.
Although myriad other factors stand in the way of more mortgage lending—including stricture bank capital requirements and general economic conditions—regulators are hopeful that with more certainty, the pendulum in the mortgage market will swing once again. This time not to the extremes of feast or famine, but to a sustainable middle ground.