CoreLogic has released its February MarketPulse report, where Chief Economist Mark Fleming discusses the current state of the economy and housing markets, as well as challenges facing the mortgage market in 2013. The potential influence of the Qualified Mortgage (QM) and Qualified Residential Mortgage (QRM) rules is analyzed.
"The impact of the QM rule on the purchase originations market is very similar to the total market that includes refinance loans," said the February CoreLogic MarketPulse report. "In the purchase market, 53 percent of the loans would meet the eligibility requirements of the QM's rule safe harbor. However, the forthcoming QRM rule will have a proportionally larger negative impact on the purchase market than on the overall market because of its downpayment requirement."
Additional key findings in the February MarketPulse report include:
►Consumer spending levels will likely be impacted by the reduction in disposable income due to the expiration of the payroll tax holiday.
►Purchase demand for homes may be negatively impacted by uncertainty created by ongoing debt ceiling debates.
►Strong mortgage origination volumes in 2012 were dominated by refinance transactions; in 2013 and 2014 refinance transactions as a share of the total mortgage origination market is expected to decrease.
►Only about half of the total mortgage originations today would qualify for QM coverage if there was no GSE exemption.
►The states most impacted by QM are Nevada and Hawaii.
"The combined impact of QM and QRM is that only 25 percent of purchase originations would meet the eligibility requirements of the QM rule's safe harbor," said the report. "Therefore, the QRM rule will be very important for the purchase market and longer-term mortgage production because, despite tighter lending standards in certain dimensions such as credit scores and DTI, the average LTVs for purchase loans has increased and the purchase market has remained heavily leveraged today."