ACUMA argues for relaxed QRM definition

The American Credit Union Mortgage Association recently urged federal regulators to adjust their proposed qualified residential mortgage requirements. ACUMA emphasized a change is needed for the current rule requiring a minimum 20 percent down payment to acquire QRM mortgages.

ACUMA argued that many credit worthy families would be able to successfully repay a mortgage loan with a lower down payment, expert underwriting and mortgage insurance. But the new requirements will deem these families underqualified, preventing them from owning a home. The letter explained why credit unions and mortgage servicers came out of the mortgage crisis unharmed.

"The reason they survived is that they maintained their dedication to their members and their communities, and to originating good mortgage loans that they reasonably determined their borrowers had the capacity and willingness to repay," the letter said.

Similarly, the National Association of Realtors wrote a letter to federal regulators opposing the proposed QRM definition that included alternative recommendations. The NAR suggested regulators define QRM to include safe and sound mortgages along with expert underwriting, and require risk retention only for those mortgages with risky product features like teaser rates and balloon payments, or weak underwriting.

Ron Phipps, NAR president, said, "Focusing the QRM exemption on underwriting factors that do not significantly improve performance means millions of families will not qualify for a QRM mortgage and instead have to pay higher rates and fees for non-QRM mortgages, assuming they are even able to obtain them." 

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