Required 20% Down for ALL Borrowers Starting April 2012

Realtors, in case you didn’t know it…by this time next year….nearly every home buyer will be required to put down 20% for a mortgage.

What do you think that will do to this very fragile housing recovery?

Nothing good, safe to say. Please pay attention to this topic and support NARs efforts to defend homeownership as part of the American Dream. Agents, be clear…if the QRM rules aren’t changed home sales will be dramatically effected as will your personal income.

Brief history of QRM and a video from Realtor.org:

NAR and its 44 partners concerned about the proposed qualified residential mortgage (QRM) regulation formed the Coalition for Sensible Housing Policy and have released an in-depth analysis of the impact of the proposed QRM. The coalition released the white paper on June 22, 2011, in connection with a press conference held by the original sponsors of the QRM provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act, Senators Johnny Isakson (R-GA), Kay Hagan (D-NC), and Mary Landrieu (D-LA), who were joined by Reps. John Campbell (R-CA) and Brad Sherman (D-CA).

The members of Congress and the coalition are urging regulators to reconsider unnecessarily high down payments, restrictive debt-to-income ratios, and tight credit requirements of the proposed QRM rule. The proposed QRM rule implements a provision of the Dodd-Frank Act that requires lenders that securitize mortgage loans to retain 5 percent of the credit risk unless the mortgage is a QRM mortgage or is otherwise exempt (for example, FHA mortgages are also exempt).

Key findings:

* Regulators should go back to the drawing board on the proposed QRM rule. As written, it violates Congressional intent, makes home ownership more expensive for millions of responsible consumers, and jeopardizes the fragile housing recovery.

* Congress left a down payment requirement off the list of suggested QRM standards in the Dodd-Frank Act because it determined that the cost of excluding responsible middle-class families would exceed the modest improvement in default rates.

* Requiring strong underwriting; documentation of income and financial resources; and safe mortgage products is the best way to minimize defaults while making safe and affordable mortgages available to a wide range of creditworthy borrowers.

* Existing homeowners, who have suffered declines in the value of their homes in the past few years, would be denied access to the best products and the lowest-cost credit when they attempt to refinance their existing mortgages if this proposed rule remains unchanged.

As written, the QRM would drive even more consumers to FHA, undermining the ability of private capital to return to the housing market.
Source: Realtor.org

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