Eased QRM proposal expected this month
Aug. 15, 2013 – A revised, eased proposed rule on what is a “qualified residential mortgage” is expected to be reissued the last week of August, reports said.
The QRM rule is being created under requirement of the Dodd-Frank Act to ensure certain lenders keep some “skin in the game” when they securitize their mortgage loans.
The original proposal would require lenders to retain 5 percent of the loans unless those loans were written to a new QRM standard that included, among other things, a maximum 36 percent debt-to-income ratio for the borrower receiving the loan and a down payment of at least 20 percent.
Bloomberg, quoting “two people familiar” with this issue, said the revised proposal is expected to raise the QRM debt-to-income criterion to 43 percent; and to “carve out” loans backed by Fannie Mae and Freddie Mac.
The CFPB’s own criteria for “qualified mortgage” includes a 43 percent debt-to-income ratio, among other things.
NAFCU, with 48 other groups in the Coalition for Sensible Housing Policy, wrote regulators in March urging them to synchronize the QRM definition with the CFPB’s QM definition.