WASHINGTON – United States Senators Mary L. Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, Kay Hagan, D-N.C., Small Business and Banking Committee Member, and Johnny Isakson, R-Ga., who spent more than three decades in the real estate industry, sent a letter urging the Federal banking agencies, the Secretary of Housing and Urban Development, and the Director of the Federal Housing Finance Agency to adhere to the legislative language and intent of the Qualified Residential Mortgage (QRM).
“We are concerned that efforts to impose a high down payment requirement for any mortgage to meet the QRM exemption standard would be inconsistent with our legislative intent,” Senators Landrieu, Hagan, Isakson. “As the authors of the QRM provision, we can assure you that, although there was discussion about whether the QRM should have a minimum down payment, in negotiations during the drafting of our provision we intentionally omitted such a requirement.”
“The QRM framework set forth in the statute specifically contemplates the inclusion of low-down payment loans, provided they have mortgage insurance or other forms of credit enhancement, to the extent such insurance or credit enhancement reduces the risk of default. We strongly urge your agencies to adopt a QRM framework that follows the statutory framework and supports a housing recovery by ensuring that all financially responsible families will have access to the lower interest rates and borrower protections afforded by the QRM. “
This letter comes on the heels of efforts to impose a high down payment requirement for any mortgage to meet the QRM exemption standard that would have a disproportionately negative effect on small lenders.
To view a copy of the letter, please click here.