A group of 30 U.S. Senators from both sides of the aisle have sent a bipartisan letter to federal regulators seeking a re-write of Section 941 of the Dodd-Frank Act pertaining to risk retention and the Act’s definition of qualified residential mortgages (QRMs). The group, led by Sens. Mary Landrieu (D-LA), Johnny Isakson (R-GA), Kay Hagan (D-NC) and Jeanne Shaheen (D-NH), feel that the proposed regulation goes beyond the intent and language of the statute by imposing unnecessarily tight downpayment restrictions, restrictions that further narrow the QRM definition, thereby increasing consumer costs and reducing access to affordable housing finance.
"The extensive additional requirements for QRMs in the proposed rule swing the pendulum too far and reduce the availability of affordable mortgage capital for otherwise qualified consumers," said the letter addressed to a number of federal regulators, including Shaun Donovan, Secretary of the U.S. Department of Housing & Urban Development (HUD); Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve Board (FRB); Sheila Bair, Chairman of the Federal Deposit Insurance Corporation (FDIC); Mary L. Schapiro, Chairman of the Securities & Exchange Commission (SEC); John Walsh, Acting Comptroller of the Office of the Comptroller of the Currency (OCC); Edward J. Demarco, Acting Director of the Federal Housing Finance Agency (FHFA); and Timothy Geithner, Secretary of the U.S. Department of the Treasury.
The bipartisan Senate letter follows a Call to Action issued last week by the National Association of Mortgage Brokers (NAMB) that also opposes the definition of the QRM set forth by Section 941 of the Dodd-Frank Act. NAMB and other industry trade groups feel that not revising the definition of the QRM will further damage the recovering U.S. housing market and placing another hurdle for the consumer in the path to homeownership.