Qualified Residential Mortgage Rule

I recently was reading an article on the black housing crisis and came across some interesting information. Marc Morial mentioned the politicians proposing to change mortgage rules. They are proposing a new requirement called Qualified Residential Mortgage Rule (QRM). The rule would require homeowners to put at least 20% down when buying property. Such rules would kick a huge group of potential home buyers out the pool. As well as limit a borrower’s debt payments to no more than about one-third of income. The purpose is to reduce the number of risky loans by requiring lenders hold onto 5% of any loans that do not qualify.



First Thoughts toward this rule popped up in 2008 and financial industry issues. The propose rule is being opposed by such organization as Mortgage Bankers Association, National Association of Homebuyers, whom feel it could take 14 years for families to save a 20% down payment.

The new rule is being proposed by:
• Federal Reserve
• Department of Housing and Urban Development
• FDIC
• Federal Housing Finance Authority
• Office of the Controller of the Currency
• Securities and Exchange Commission

What this rule could do…..
• Higher prices for individuals not a part of the wealthy class.
• Shrink pool of home buyers.
• Force up borrowing cost for low income/younger borrowers.
• Could hurt 11 million of current homeowners who owe more than their homes worth.