VantageScore suggested that lending to "upsiders" and "minimalists" can be accomplished without increasing default risk.

The lender had $1.69 billion in mortgage originations in 2014, according to estimates by Inside Mortgage Finance.

Higher interest rates prompted declines in applications for both refinances and purchase mortgages.

“When someone tells you that the ATR rule is working, keep in mind it’s working because it actually stands on exemptions," said Rod Alba, senior regulatory counsel at the American Bankers Association.

The NCRC said Bank of America, Discover Bank, Synchrony and TD Bank, among others, have supported the program.

Originations of VA mortgages in the first quarter of 2015 increased by 5.8 percent compared with the previous quarter and were up 86.0 percent from the first quarter of 2014.

But the combined Truth in Lending Act and Real Estate Settlement Procedures Act disclosures may not be as bad as many seem to fear.

“The short-term outlook remains dismal,” said Quincy Tang, a managing director and head of U.S. residential MBS at DBRS.

The VA maintained a sizeable lead in first-lien mortgage refinancing over FHA and private mortgage insurers in the first quarter of 2015 but yielded to both in purchase originations.

The average bid on the benchmark Fannie Mae 30-year 3.50 percent MBS fell to 102.2 this week compared to 104.5 earlier in the month, leaving some market watchers feeling sick to their stomachs. The general fear is that MBS prices may fall further over the short term as interest rates rise. The question for many boils down to the basics: Where will mortgages settle? As Inside MBS & ABS went to press this week, the yield on the 10-year Treasury reached...