CoreLogic released QRM and Risk Retention Standards: Foundation for a Sound Housing Market, the second white paper in a series intended to address the implications of new and revised federal regulations. In this edition, the re-proposed Credit Risk Retention (CRR) rule and Qualified Residential Mortgage (QRM) alternatives are outlined and analyzed, helping to bring greater clarity to the requirements. The paper also addresses the issue of QRM exemptions for the government-sponsored entities (GSEs) and the effect of the rules on loans outside the standard, such as jumbo loans.
Key insights provided in QRM and Risk Retention Standards: Foundation for a Sound Housing Market include:
►An overview of the QRM and CRR rules’ original purpose and design, their pathway through the rule-making process and their current status.
►A discussion of the difference between the two alternatives in the CRR re-proposal and their impact on the securitization of conforming and non-conforming loans.
►Analysis of the exemptions for securities issued by GSEs and the uneven incentives the exemptions may create for private securitization of non-exempt loans.
►Consideration of the impact the re-proposal may have on the issuance and securitization of jumbo loans.