The Case Against the Proposed QRM Rule
In case you didn't know it, this time next year (unless something changes) getting a mortgage will be even MORE challenging.
QRM, Qualified Residential Mortgage Guidelines: Required 20% Down Payment.
Down-Payment Requirement Not Necessary for Credit-worthy Borrowers: An
increase in the down payment requirement from 5% to 20% would lower
default rates by only three-fourths of one percentage point based upon
historical loan performance data (2002-2008).
Requirements Put Homeownership Out of Reach for Credit-worthy Borrowers.
The proposed 20% down payment requirement will exclude responsible low
and moderate income borrowers from stable, consumer-friendly mortgages
at affordable interest rates.
* Down Payment Requirements
Jeopardize the Nation's Economic Recovery. Existing homeowners, who have
suffered declines in the value of their homes in the past few years are
about to get walloped again and denied access to the best products and
the lowest cost credit when they attempt to refinance their existing
mortgages if this proposed rule remains unchanged
rejected down payment requirements - The proposed QRM regulations are
contrary to clearly expressed Congressional intent. The QRM sponsors,
Senators Landrieu, Hagan and Isakson, have repeatedly told the
regulators their intent was a broad, inclusive QRM standard that would
encourage sound underwriting and consumer-friendly loans and not exclude
large number of credit-worthy borrowers.
* Regulators have
offered no data to support the QRM. The QRM regulations are supposed to
be based upon "historical loan performance data" and designed to
incorporate features and underwriting standards the produce lower rates
* Good underwriting is the best way to prevent defaults.
* The proposed debt-to-income ratios of 28/36 are outmoded,
extremely restrictive in this tight economy and unnecessary for