The qualified mortgage (QM) rule that took effect in January will raise mortgage rates for borrowerw with lower FICO according to survey of lenders released today.

A survey by economists at the National Association of Realtors found that borrowers who cannot qualify for QM status because of their credit histories will pay a big price in higher mortgage rates.

The survey found that all non-QM borrowers will suffer but those with lower FICO scores will suffer more.  One third of survey respondents indicated that rates for borrowers with non-QM loans and FICO scores between 640 and 720 as well as those with scores greater than 720 would face rate increases of 50 to 75 basis points.  The distribution of respondents in the survey suggested prime borrowers will get better pricing than near prime.

However, 50 percent of respondents indicated that borrowers with FICO scores of 640 and below would face rate increases of 150 basis points or more.  No respondents indicated the rate increase would be less than 50 to 75 basis points for FICOs of 640 or less and no respondent indicated that rates would not rise for non-QM borrowers.

The QM Rule took effect in January and is the first of two rules from the Dodd–Frank legislation that will directly impact the housing market. It is intended to protect consumers by strengthening underwriting standards, but some have argued that the rules will raise costs and reduce access for consumers.