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Wednesday, January 23, 2013

Sen. Corker Urges Regulators to Align ‘QRM’ With ‘QM’

Senate Banking Committee member Bob Corker (R-Tenn.) urged federal regulators in a letter to align the pending risk retention rule’s “qualified residential mortgage” standard with the “qualified mortgage” standard under the ability-to-repay final rule that the CFPB recently issued on Jan. 10.

Corker noted that loans backed by Fannie Mae, Freddie Mac and the Federal Housing Administration would be exempt from the risk-retention rule’s requirements. Therefore, if the QRM standard is written differently than the QM standard, “most financial institutions will only originate loans intended for sale to the FHA, VA or to a GSE. … [and] such an outcome would not be at all healthy for our financial system,” he said.
Matching the CFPB’s version of a safe loan for any borrower with your definition of what constitutes a loan that is safe for securitization makes sense for our system, and it would be wholly consistent with the statute.
Read Corker’s letter.

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