WASHINGTON – Aug. 28, 2013 – Lawmakers looked at the recent real estate meltdown and empowered federal agencies to dictate minimum loan terms – a standard intended to keep homebuyers from over-extending themselves to get a mortgage in the future.
Observers feared that either of two planned rules – the qualified mortgage (QM) and the Qualified Residential Mortgage (QRM) – might create strict borrower requirements that would effectively slow the real estate rebound by keeping many qualified buyers from purchasing a home.
In February, the Consumer Financial Protection Bureau (CFPB) issued a rule for the QM that becomes effective in January 2014. The QM’s goal was to make sure mortgages were fair to buyers, but its terms did not match industry observers’ fears of a downpayment requirement as high as 30 percent. In general, its rules will keep unqualified borrowers out of the mortgage process without impacting most qualified buyers.
Today, rules announced for the QRM are similarly effective.
In fact, the agencies in charge of creating the QRM rules – The Federal Reserve, the Department of Housing and Urban Development, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission – issued a notice, pending public comment, that the QRM rules should “have the same meaning” as the QM codes earlier.
“The re-proposed Qualified Residential Mortgage rule announced this morning is a victory for homebuyers and the future of homeownership in this country,” says National Association of Realtors® President Gary Thomas. “This version of the QRM rule will give creditworthy buyers access to safe and affordable loan products without overly burdensome downpayment requirements.”
NAR actively campaigned against strict rules under both the QM and QRM. It “would have denied millions of creditworthy Americans access to the lowest cost and safest mortgages,” says Thomas. And NAR will “continue to oppose any regulation that requires unreasonably high downpayments from consumers.”
© 2013 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.