After three years of fervent opposition by legislative bodies, the National Association of Realtors (NAR), and industry and consumer assemblies, financial regulators approved the final version of the qualified residential mortgage (QRM). The updated rule is equivocal to the Qualified Mortgage (QM) standard.
Initially, under Dodd-Frank, consumers desiring to purchase a home required a 20 percent down payment on the property and meet strict debt-to-income ratios. Opposition to the rule stated that the required 20 percent down payment and stringent qualifications for a mortgage was hindering the public and making it too difficult to purchase a home.
The Coalition for Sensible Housing Policy was formed that includes 50 organizations. The main goal of the coalition was to advocate for home consumers and decrease stringent qualifications. The coalition was able to extend the due date for comments on the proposed regulation in 2013. The extended time was utilized by gaining support from 282 House members, 44 U.S. Senators who then wrote to regulators. In their proposal, government officials stated their objectives on QRM and stand on opposing the 20 percent down payment condition.
The revised document consists of 689 pages that define specific rules and regulations for financially practical and safe mortgage financing. The synchronized definitions between QM and QRM ensure creditworthy consumers have the ability to safely access mortgage financing and have lower default risk. The final ruling can be assessed here.
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