New mortgage lending rules proposed today by federal regulators take a big step forward in strengthening the U.S. housing market and economy.
In revised proposed rules defining "qualified residential mortgages" (QRM), regulators crafted standards that address key causes of the past housing crisis and will prevent future abusive lending. At the same time, the newly-proposed rule will protect access to credit for many homebuyers by not mandating downpayment levels.
Research from the UNC Center for Community Capital and the Center for Responsible Lending has shown that low downpayment home loans have been a significant and safe part of the mortgage finance system for decades. These loans bear little resemblance to subprime mortgages that crashed our economy.
Finally, the alignment of QRM with the Qualified Mortgage (QM) rule provides consistent regulation and helps all stakeholders to better comply with these important lending rules.
As the debate now turns to other housing reform issues, CRL calls for future policies to follow a consistent path on downpayment requirements.
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For more information: Ellen Schloemer at (919)539-9092 or ellen.schloemer@responsiblelending.org.