Analysts Weigh in on Potential Impact of Proposed QRM Rule

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Whatever the rules are that are adopted it will probably cost the home buyer more money to close.  Please read the article below and let me know what you think.

The FHA Condos Approval Company, Inc.

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Following the release of the revised Qualified Residential Mortgage (QRM) rule from six federal agencies, several analysts offered insight into how the revisions might benefit or impede progress in the mortgage market.

In the new proposal, the push for a 20 percent down payment in 2011 would be replaced with a no down payment requirement, which would bring QRM more in line with the Qualified Mortgage (QM) rule the Consumer Financial Protection Bureau (CFPB) released in January.

Another important revision that aligns with the CFPB’s QM definition is the 43 percent debt-to-income ratio requirement for borrowers rather than the original 36 percent limit.

Fitch Ratings stated it believes syncing QRM and QM proposals will make the transition to the new rules easier for originators and lead to reduced costs.

“Most of the existing prime jumbo originators have been implementing technology and internal methodologies to meet the requirements of QM. However, the uncertainty over QRM had posed some logistical challenges,” Fitch said.

According to the rating agency, adopting a QRM standard that mirrors the QM definition would also trigger more activity for the jumbo origination and securitization market.

To see the complete article – please use the link below.

Impact of Proposed QRM Rule

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