WRITE TO YOUR CONGRESSMAN IT WORKS!
I recently wrote to Congressman Sam Farr regarding my concern about restrictions in the QRM regulation. This would severely impact potential homeowners and the real estate industry in general. Today, I received a response from Congressman Farr.
Please write your own Congressman when you have concerns...that is what they are there for. Your concerns will be heard. Write to your Congressman..it works.
Together, we can make a better world for everyone
COPY OF LETTER FROM CONGRESSMAN FARR:
Dear Leslie:
Thank you for sharing your concern about restrictions in the proposed Qualified Residential Mortgage (QRM) regulation that, if implemented, could severely impact potential homeowners and the real estate industry. I greatly appreciate hearing from you on this important issue.
As you may know, the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in 2010 included a "risk retention" rule that requires banks and firms that issue mortgage-backed securities to retain 5% of the loans that they bundle and sell as securities. This rule was implemented to ensure that these banks and firms would be more hesitant to package so many risky loans -- the same loans that spurred the financial crisis -- since the banks and firms would be required to retain a part of the securities they sell to investors. The cost for this increased safety is higher costs for banks and borrowers since banks must hold more capital in reserve. As the federal regulators work on regulations to implement Dodd-Frank, one of the issues is defining a Qualified Residential Mortgage (QRM) that will be exempt from the risk retention requirements. One of the proposals under consideration would require a 20% down payment under the QRM definition.
I wholly agree with Realtors that a 20% down payment would reduce the availability of affordable mortgage money for qualified borrowers. You will be interested to know that on May 27 I signed a letter to federal regulators expressing my concerns. A copy is attached.
Realtors build community and provide an important service. Please be assured I will continue to monitor this issue keeping your comments in mind.
Sincerely,
SAM FARR
Member of Congress
SF/dm
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