QRM DEAD ON ARRIVAL?
The qualified residential mortgage idea may be dead! If so, this will be one of the first things they have gotten right in Washington.
I'm all about making good loans, but asking buyers to put down 20% or have the lender hold back 5% of the loan amount to cover defaults would be burdensome to the housing recovery at this time. It is being widely reported that the demise of QRM is broadly supported in Washington.
Of course exempt from this ruling were the government loans that require less down. Is that to say FHA loans never default? As usual the QRM idea was a bit over the top. When you consider that underwriting is so tight now, guidelines have been ratcheted up for down payment, PMI, debt ratios, reserves, etc. How much more intervention is needed and at what point can common sense take over?
I would love for this to be one step in the right direction followed by a whole gaggle of things they start doing RIGHT in Washington to IMPROVE the outlook of housing.
