Debt

MBA: Suitability Standard Would Have ‘Severe’ Consequences 

The Mortgage Bankers Association said yesterday that imposing a proposed suitability standard on mortgage lenders would have a chilling effect on consumers and on an already troubled housing market. Suitability standards would require mortgage lenders to subjectively evaluate whether a loan product is best suited for a borrower, which the trade organization said will limit the availability of credit and increase costs to consumers. “After 25 years of the industry developing increasingly sophisticated and objective underwriting standards, a suitability standard would turn back the clock on fairness in lending by virtually requiring lender subjectivity in the lending decision,â€? said Kurt Photenhauer, MBA’s senior vice president of government affairs.