Federal banking regulators have re-proposed the qualified residential mortgage (QRM) rule, which requires lenders to hold back 5 percent of the loan amount on securitized home mortgage loans unless they originate the loans based on “safe” guidelines, which are defined in the rule.
Those safe loan guidelines track requirements in the qualified mortgage (QM) rule, which was released last year and which NAR generally supports. (QM defines safe mortgage guidelines for federally backed loans, whether or not they’re securitized. QRM only applies to securitized loans.)
Regulators are now taking public comments on the QRM rule, and although the rule tracks NAR recommendations in key respects, regulators are seeking views on whether an alternative approach should be considered. That alternative approach specifies a minimum down payment requirement, which NAR and its partners in a coalition, the Coalition for Sensible Housing Policy, oppose. So, more work will be needed in the months ahead to let regulators know that the alternative approach raises concerns among industry groups.
Both QM and QRM are to be finalized in early 2014 under the Dodd-Frank financial services reform law that was enacted two years ago.