August 13th, 2011 10:55 AM by Christopher Terry
Could your friends or family afford a 20% down payment? Could you? Can you envision what the prospective home buyer pool will look like if new regulations governing Qualified Residential Mortgages (QRM) take effect this year?
Neither can we. And neither can many elected officials in Congress who did not intend for these regulatory provisions to be so narrowly defined. It is important that we all understand just how detrimental the new QRM rules would be to the ongoing housing and lending crisis in America.
According to NAR Research, 60% of recent home buyers made less than a 20% down payment, and it would take 14 years for a typical person to save up a 20% down payment to buy a median-priced home. In Massachusetts 20% of the median home price is $60,000. Do you have $60,000 for a down payment? Do your friends? Your family? Your kids? And for homeowners what will this do to your homes current value? If this new regulation pulls 60% of the home buyers out of the market you can be sure values will plummet.
Please contact congress today and ask them to make it clear to the regulators that this proposed regulation was not their legislative intent and to instead implement a more reasonable Qualified Residential Mortgage (QRM) that will keep credit-worthy buyers in the market and able to acquire a loan.
To learn more about the QRM and Risk Retention rules of the Dodd-Frank Bill and what NAR's thoughts are click here.