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Statement from NAHB Chairman Kevin Kelly on New Mortgage Market Standards

WASHINGTON, D.C. – October 21, 2014 – (RealEstateRama) — Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Del., issued the following statement on today’s announcement by six federal regulators to establish new rules for a qualified residential mortgage that would exempt securitizers from retaining 5 percent of the credit risk on loans packaged and sold as securities:

“NAHB commends U.S. financial regulators for aligning the definitions of a qualified residential mortgage (QRM) and the qualified mortgage (QM), the standard lenders must follow to demonstrate they have determined a borrower’s ability to repay a mortgage loan.

“Since 2011, NAHB has worked independently and with a coalition of housing advocates to urge regulators to establish a QRM rule that removes downpayment requirements and other onerous underwriting criteria to alleviate confusion in the marketplace and keep homeownership affordable for working American families.

“We applaud regulators for taking these measures. The new QRM rule will encourage sound lending behaviors that support a housing recovery, attract private capital in the mortgage market, help ease tight credit conditions for borrowers and reduce future defaults without punishing responsible borrowers and lenders.”