The definition of redundancy is "superfluousness, the state or fact of not being needed or wanted." Not sure, but think we may have that situation in regards to the federal government trying to regulate the issuance of residential mortgage loans. At present there are six regulators weighing in on the issue: the Federal Reserve; Federal Deposit Insurance Corporation (FDIC); Office of Comptroller of the Currency; Department of Housing and Urban Development (HUD); Federal Housing Finance Agency, and the Securities and Exchange Commission (SEC). Think we have enough government workers with an opinion?
Then we have the Consumer Financial Protection Bureau ((CFPB). All people want is access to the mortgage market and ability to finance a home purchase. Out comes a rule QM - (Qualified Mortgage). No wait, not quite good enough so we will give it more teeth and adopt another rule to be applied in conjunction with QM and it will be called QRM- (Qualified Residential Mortgage).
Come January 2014 we will be drowning in rules but what about the availability of credit? Some of these gifted brainiacs think it best that banks retain some "skin in the game" if a residential mortgage borrower does not have 30% downpayment. Wow, that could hurt the real estate market. A bank would have to accept risk retention by setting aside greater capital requirements. Nope, that won't help the economy!
Choice two is to utilize the QM rules and not require banks to satisfy the QRM rules of risk retention requirements! If this is the case why were time and federal resources, your tax dollars, utilized to adopt QRM in the first place?
Are you confused yet? A lot of fancy words and unique acronyms but no faith that our legislators or federal employees have a clue. It appears that what we are stuck with is redundancy! What do you think? Can you say "superfluousness?" Enjoy your day!
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