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Tuesday, January 7, 2014

Keating in USA Today: QRM Standard Protects Homebuyers

By aligning the Qualified Residential Mortgage (QRM) standard with the CFPB’s Qualified Mortgage standard, financial regulators helped preserve access to mortgage credit, ABA President and CEO Frank Keating said in a USA Today “Opposing View” editorial. He was responding to an editorial arguing for a tighter QRM rule, which he said would have “dissuaded many lenders from originating mortgages outside of those very tight boundaries, thus limiting credit -- with disproportionate harm to low-income and first-time homebuyers.”

Instead, Keating noted, regulators decided to use the QM standard for the risk retention rule. This will protect taxpayers -- as QMs are considered very safe and new rules require lenders of non-QMs to retain some of the default risk -- while maintaining broader access to credit.

Read the editorial.

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