Bi-partisan effort to curb QRM (Qualified Residential Mortgage)
TAKE ACTION NOW
https://secure.homeowneraction.org/site/Advocacy? cmd=display&page=UserAction&id=153&utm_source=hac&utm _medium=banner&utm_content=narpub&utm_campaign=qrm2011
A new and costly rule called Qualified Residential Mortgage, is being considered by federal regulators. If the proposal passes it would require homebuyers to make at least a 20% down payment on a home purchase for the most affordable rates. Federal regulators have taken a law passed by Congress intended to prevent future banking collapses and turned it into an unintended penalty on homebuyers.
It’s a fact: many hard-working, credit worthy Americans have a difficult time saving for the down payment to buy a home. This proposal would create a high down payment hurdle for first-time and low-income home buyers and make refinancing much more expensive for credit-worthy home owners too. Everyone will suffer.
Please make your voice heard. You can help keep the Dream of Home Ownership Alive. Simply fill in your name and address in the provided form and hit “Send this message”. HUD‘s comment period closes August 1, 2011 so please act before the deadline.
Based on 2010 estimates of median income and home prices from the National Association of REALTORS® and the 2010 national savings rate, it would take 9.5 years for the typical American family to save enough money for a 10 percent down payment and closing costs, and fully 16 years to save for a 20 percent down payment and closing costs. A 10 or 20 percent down payment requirement for the QRM means that even the most creditworthy and diligent first-time homebuyer cannot qualify for the lowest rates and safest products in the market. As a result, responsible consumers who maintain good credit and seek safe loan products will be forced into more expensive mortgages under the terms of the proposed rule simply because they do not have 10 or 20 percent or more in down payment or even more equity for refinancing.
Weak underwriting and toxic mortgages are the main cause of mortgage defaults, not well-underwritten mortgages that allow for low down payments. Requiring a higher down payment and rigid credit standards does little to reduce risk of default, but rather creates unnecessary barriers for responsible consumers looking to purchase or refinance a home. I strongly encourage you to define QRM based on sound underwriting and safe mortgage products, not criteria that do little to increase safety but that deny millions of Americans access to the best mortgages.