FDIC to Propose "Qualified Residential Mortgage" Definition

The debate over what counts as arn”Qualified Residential Mortgage (QRM)” may be coming to an end in the near future.  The Federal Deposit Insurance Corporation (FDIC) has scheduled a meeting of its Board of Directors for nextrnTuesday to vote on the issue. A draft of the proposed rule will be made available to the public at thatrntime.</p

QRMs are home loans that willrnbe exempt from the requirement that mortgage lenders retain a 5 percent share of each loan they originate that is packaged for securitization -rnkeeping so-called “skin in the game.” rnDodd-Frank specificallyrnidentified loans guaranteed or originated by FHA, VA, and USDA as qualified forrnexemption but left other products, including loans written by Fannie and Freddie, up to federal regulators to determine.  </p

Glen Corso, managingrndirector of the Community Mortgage Banking Project (CMBP), said the FDIC meeting announcement implies a substantial amount work on the QRM is complete and allrnof the regulators have signed off on the proposal.  Corso said it appears that the FDIC will move first onrnthe rule, and “we expect that the other agencies — OCC, the Fed, HUD, SECrnand the FHFA — will be approving the rule in the days following the FDIC’srnaction.”  Once the agencies sign offrnthe rule will be published in the FederalrnRegister and a period of public comment (typically 60 days) will begin.   </p

MND has published much content on the topic…</p

Risk Retention and Transparency in the Mortgage Market</p

Pending Risk Retention Guidelines Create More Confusion in Mortgage Industry</p

Risk Retention Regs Boost Mega-Bank Market Share</p

Horizontal vs. Vertical Risk Retention</p

Proposed Risk Retention Reform Affects Banker and Broker Loan Pricing</p

Risk Retention Reform is Top Priority. White Paper Winners and Losers

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