Below is an update on the latest that has to do with the QRM issue. This is slightly eencouraging news. Please send your comments if you have not done so yet. It seems that we have someones attention and as we all know the attention span of regulators is only a big as the rucous made over an issue.
This is the updated link to send place your comments. http://www.regulations.gov/#!documentDetail;D=HUD-2011-0056-0001
Treasury Official: 'Seriously Considering' Criticism Of Mortgage Rule
By Alan Zibel
Of DOW JONES NEWSWIRES
533 words
24 June 2011
05:00
Dow Jones News Service
DJ
English
(c) 2011 Dow Jones & Company, Inc.
WASHINGTON (Dow Jones)--The Obama administration is "seriously considering" criticism of a proposal by bank regulators that could cause mortgage rates to rise on all but the safest home loans, a Treasury Department official is set to say Friday.
The administration and regulators have been under fire in recent weeks from lawmakers and an alliance of housing industry lobbying groups and advocates for minorities and consumers. They argue that a proposal mandated by the Dodd-Frank financial overhaul law to overhaul the market for mortgage-backed securities will restrict credit and undermine the already weak housing market. The Dodd-Frank law aims to spur sounder lending practices by requiring banks that package mortgages and other assets into securities to have more "skin in the game." They are to meet this requirement by holding 5% of the credit risk for those loans.
An uproar on Capitol Hill has grown in recent weeks over how regulators interpreted a portion of the law that allows certain loans to be exempt from the requirement. Lawmakers, industry officials and consumer groups argue that regulators have misinterpreted the law and drawn up too-stringent criteria for these gold-standard loans, which are likely to cost borrowers less.
Regulators have given the public until August 1--nearly two months longer than originally planned--to comment on the proposal. "We are seriously considering feedback and are committed to getting this rule right, so that we can ensure securitization is a stable and reliable source of credit for consumers, businesses, and homeowners," said Jeffrey Goldstein, under-secretary for domestic finance at the Treasury Department, in remarks prepared for a speech at a housing conference on Friday.
Under the proposal, a "qualified residential mortgage" exemption would kick in when borrowers make down payments of at least 20% and meet certain debt-to-income thresholds. Those loans would be exempt from risk-retention.
But critics worry that the exemption requirements will create a de facto underwriting standard for home buyers, making it hard for many first-time buyers to buy a home without a 20% down payment.
Earlier this week, a bipartisan group of lawmakers decried the rule, with Sen. Johnny Isakson (R., Ga.), saying it would "make recovery in the housing market almost impossible" and Sen. Kay Hagan (D., N.C.) saying that " strict, inflexible restrictions proposed by banking regulators could put home ownership out of reach for many creditworthy American families."
Goldstein, however, said the regulators, by establishing so-called risk-retention rules, aim to solve "one of the major problems we saw in the financial crisis--the lack of alignment of interests" between investors in mortgage-backed securities and the companies that make loans and package them into investments. "We are committed to implementing risk retentionreforms in a thoughtful manner that ensures continued access to sustainable mortgage credit for low- and moderate-income borrowers and protects the health of the still-fragile housing market." he said. Better lending practices, he said, "make future housing crises less likely and less damaging."
-By Alan Zibel; 202-862-9262; alan.zibel@dowjones.com [ 06-24-11 0500ET ]
Dow Jones & Company, Inc.
Document DJ00000020110624e76o0000y
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