MBA Calls Proposed Risk Retention Down Payment “Nearly Insurmountable”

Mortgage Bankers Association board member Henry Cunningham Jr. testified before the House Financial Services Committee Subcommittee on Capital Markets and Government Sponsored Enterprises last week at a hearing on the newly proposed risk retention requirements.

On behalf of the MBA, Cunningham, who is MBA Residential Board of Governors chairman, spoke of the “profound effects on our housing and real estate recovery” that the rule would have. “If finalized in its current form,” he said, “the result will be much higher costs for the vast majority of consumers, and diminished access to credit for many others.”

Cunningham outlined what he called the most controversial part of the rule: the qualified residential mortgage (QRM) exemption. QRMs would include those that are government-insured, meaning FHA-backed reverse mortgages would be exempt from the rule.

For mortgages overall, Cunningham said,”FHFA reports that less than one third of the loans purchased by Fannie and Freddie in 2009 would have met these requirements. This is all the more notable because 2009 was the most cautiously underwritten market in generations. … The hardest hit would be first-time homebuyers, minorities, and middle class families, for whom the down payment requirement would be nearly insurmountable.”

The rule is currently open for comments, which will be accepted through June 10. Cunningham urged the subcommittee to extend the comment period to permit a full discussion of the rule’s implications.

View Cunningham’s full statements at

Written by Elizabeth Ecker


Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please