The National Association of Mortgage Professionals (NAMB) has issued a call to action to members regarding the Qualified Residential Mortgage (QRM) standard proposed rule currently in the public comment period.
In order to qualify as a QRM under the proposed rules, requirements include having a minimum of 20% down payment, cannot be 30 days late on any debt obligation, and have debt to income ratios below 28/36. NAMB government affairs chairman Mike Anderson warns that if the rule proceeds as written, it could result in non-QRM mortgage interest rates increasing by at least 2%. In the sample letter that NAMB is encouraging members to send to government representatives, NAMB warns that the current rules are too onerous and will threaten recovery in the housing industry.
Under the current rule, NAMB states, many highly qualified mortgage borrowers would be unable to qualify for a QRM loan. The organization believes that it is impossible to create a single "box" under a QRM standard without drastically impacting the housing market.
Additionally, NAMB suggests that this will lead to an increase in FHA insured mortgages that would force Congress to revise FHA rules by increasing insurance premiums and making FHA loans more restrictive.
NAMB does support the requirement of a QRM standard, but they say the current parameters of the rule go far beyond what is necessary. The QRM risk retention standard, according to the organization, should apply to specific types of mortgages, such as subprime, pay-option ARMS and stated income.