The proposed Qualified Residential Mortgage (QRM) rules have a better chance at harming the housing market than they have at addressing underlying weaknesses in the securitization process. They are an overreaction to the excessive risk-taking during the housing boom. 

Regulators need to abandon the proposed approach at defining QRM-eligibility and implement a QRM scorecard that provides transparency to the market and allows for prudent but flexible risk-taking while also permitting well-qualified borrowers to participate in housing at reasonable costs.

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