The six regulatory agencies that are working on the qualified residential mortgage risk retention rule are looking at aligning it with the qualified mortgage rule, according to a key participant.
“This alignment between QM and QRM we believe is a very important piece of what we need to consider in finalizing that standard,” HUD secretary Shaun Donovan said Thursday.
The Consumer Financial Protection Bureau issued the final QM rule in January. The QM rule is designed to ensure that consumers get safe mortgages that they can afford to repay.
The CFPB’s rulemaking makes room for most loans being originated today, including Fannie Mae, Freddie Mac and Federal Housing Administration, to qualify as QM loans.
Under the Dodd-Frank act, non-QM loans will be subject to risk retention where the originator of a securitization must retain 5% of the credit risk.
If regulators decide QRM loans must have high down payments, it would mainly hurt private lenders that originate non-government-backed loans.
“We will move forward as quickly as possible to establish the right standard,” Donovan told the Mortgage Bankers Association at their annual Washington conference.