The interaction between the qualified mortgage standard promulgated earlier this year by the Consumer Financial Protection Bureau and the qualified residential mortgage standard still being developed by other federal regulators is going to have a myriad of unpleasant side effects for the securitization sector, according to a top industry attorney. “Linking of qualified residential mortgages (QRM) in the risk-retention rules to the definition of qualified mortgage (QM) in the CFPB’s ability-to-repay rules will further deepen the divide between QM and non-QM loans in terms of pricing and availability,” said Stephen Kudenholdt, chairman of the capital markets practice at the Dentons LLC law firm in New York City. Speaking during a webinar this week sponsored by Inside Mortgage Finance, an affiliated publication, the attorney indicated...
“Any future announcement will be made in conjunction with stakeholders to minimize volatility in the MBS market,” Ginnie Mae said, emphasizing that no decision has been made on the issue.
There is no mention in the SunTrust filing how much HUD/FHA might receive. A spokesman for the bank declined to provide a number to Inside Mortgage Finance.
“Linking of qualified residential mortgages (QRM) in the risk-retention rules to the definition of qualified mortgage (QM) in the CFPB’s ability-to-repay rules will further deepen the divide between QM and non-QM loans in terms of pricing and availability,” said attorney Stephen Kudenholdt of Dentons LLC.
The most important take away from this week’s loan limit reduction news: Congress warning DeMarco that he’d better defer to them on loan limits. His reply: radio silence. Meanwhile, Wells tosses Freddie overboard, sort of.
The Federal Housing Finance Agency holds the keys to the Fannie Mae/Freddie Mac loan limit kingdom, but it’s giving no clues – or interviews – as to where it’s headed on the issue. Meanwhile, pressure is mounting on the regulator to do nothing. As far as the mortgage industry is concerned, it knows a change is coming and hopes that when FHFA finally lowers the current high-cost limit of $625,500 the implementation date will come deep into the second quarter of 2014, or at the very least, March 31.
Over the past year, some lenders have complained privately about the presence of enforcement attorneys during examinations, telling Inside Mortgage Finance that it can be intimidating to staff.
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