After nearly three years of deliberations, regulators have finalized the Qualified Residential Mortgage (QRM) rule. The final QRM rule relies on sound and responsible underwriting rather than on an onerous downpayment requirement to qualify as a QRM loan. The final rule also comes without the risk-retention requirement for qualified residential mortgages.
The final rule becomes effective one year after publication in the Federal Register for residential mortgage-backed securitizations.
NAR strongly opposed earlier versions of the rule that included 20 and 30 percent downpayment requirements, which would have denied millions of Americans access to the lowest cost and safest mortgages.
To mobilize against the proposed QRM rules that would have excluded credit-worthy Americans from the housing market, NAR forged the broad-based Coalition for Sensible Housing Policy, a partnership of approximately 50 consumer organizations, civil rights groups, lenders and real estate professionals united in their opposition to high downpayment requirements.
NAR had been vocal for several years that the QRM rule should be broad rather than prescriptive and that it should match up with the qualified mortgage (QM) rule, which took effect at the beginning of 2014, and the QRM rule does in fact do that. The QM rule provides ability-to-repay standards for safe and affordable loans, whether or not they're securitized for sale to investors.
The final QRM rule is a win-win for consumers, Realtors® and the housing finance industry.