Preparing for a QRM World: What Does It Mean to Sync QRM with QM?

An Inside Mortgage Finance Webinar

Recorded October 10, 2013


In an anxiously awaited move to finally implement the “risk retention” mandate of the Dodd-Frank Act, federal regulators have just unveiled a new Qualified Residential Mortgage proposed rule that will play a major role in shaping the secondary mortgage market of the future. Importantly, the new proposal closely aligns the definition of a QRM with the Consumer Financial Protection Bureau’s already finalized “ability-to-repay” or Qualified Mortgage rule.

While this alignment should make it easier for mortgage market players to meet the QRM standards when it comes to securitizing and selling residential mortgages, the somewhat rigid underwriting standards of QM could make it very difficult to offer anything but plain vanilla mortgage products. In addition, the new QRM proposal includes an alternative requirement of a 30 percent downpayment. Lenders are required to keep a 5 percent share of any mortgage they sell or securitize that doesn’t qualify as a QRM.

Listen to the IMF webinar “Preparing for a QRM World: What Does It Mean to Sync QRM with QM?” to learn what this major mortgage rule could mean for you and your business in 2014 and beyond. We’ll walk you through the new Qualified Residential Mortgage proposals, differentiating the two options offered and explain the potential compliance obstacles. You’ll hear from some of the top regulatory experts in the country on what you can do to prepare for a new QRM world.

During the 90-minute webinar, you’ll hear from:

  • David Stevens, President and CEO, Mortgage Bankers Association
  • Laurence Platt, Partner, K&L Gates
  • Stephen Kudenholdt, Chair, Capital Markets Practice, Dentons

Among the questions we address:

  • What is the put-back risk for lenders associated with securitizations of QRM loans?
  • Are there hidden pitfalls for lenders or investors if the QRM standard is aligned with the QM rules?
  • Can you thrive as a lender if you make only QM/QRM loans?
  • What are the fair lending compliance risks of making only QM/QRM loans?
  • In a QRM=QM world, can the private or non-agency securitization market survive, much less grow?
  • If the QRM rule ends up including a downpayment requirement, how will that impact the availability of higher LTV mortgages?
  • How does the elimination of the premium capture cash reserve account change secondary market options?
  • What are the capital requirement ramifications of the new QRM proposal and will it change the capital needed to hold or securitize mortgages?
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