Regulators have proposed new mortgage rules that will give more Americans access to mortgage credit, generating a positive reaction from housing stakeholders.

The proposal would align the qualified residential mortgage rule (QRM) with the qualified mortgage rule (QM), finalized earlier this year, setting standards for safe lending. An earlier version of QRM proposed a 20 percent down payment requirement for all QRM loans, which would have made low-down-payment loans to responsible low- and moderate-income borrowers much more difficult.

Regulators “Listened” to Industry Stakeholders

Chris Estes, president and CEO of the National Housing Conference (NHC), welcomes the new mortgage rules, along with a diverse coalition of many housing stakeholders.

“This new proposal shows that regulators listened to the comments from the wide range of stakeholders involved,” he said. “Aligning the QRM rule with the QM rules will allow more American families to become homeowners and ensures that housing markets can remain strong in the future. This is especially important for communities that are still rebuilding from the foreclosure crisis.”

New Mortgage Rules = More Affordable for the Average Family?

An earlier version of QRM proposed a 20 percent down payment requirement for all QRM loans, which would have made low down payment loans to responsible low and moderate income borrowers much more difficult. According to David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA), regulators are considering an alternative option that would add a 30 percent down payment or equity requirement to the QRM definition. Even though he strongly supports the core proposal, this aspect of it concerns him.

“Such steep down payment requirements are unnecessary to accomplish the purposes of the QRM standard and would severely impair access to credit for all but the most well-heeled borrowers,” he said.

Until more specific details are released, it has yet to be determined whether this new mortgage rules will help the average American family purchase a home. But Stevens and other housing stakeholders have a positive feeling that this proposal is headed towards the right direction.

“MBA applauds the regulators for carefully balancing the competing policy objectives in this rule, and looks forward to continuing to work with them to ensure that the other portions of this rule are strengthened in order to bolster the real estate markets and also protect borrowers and investors,” he said.