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QRM/Risk Retention

Title IX of the Dodd Frank Act required that mortgage loans eligible for sale to the secondary market for securitization must include either a five percent risk retention requirement or meet standards exempting loans from risk retention.  These standards are to be developed jointly by the prudential bank regulators and the SEC, HUD, and the FHFA.  Loans meeting the new standard and exempt from risk retention are to be deemed Qualified Residential Mortgages (QRM).  The initial proposal issued by the regulator would have required QRM loans to have a minimum 20 percent downpayment requirement.  ABA and a broad coalition of lenders, realtors, homebuilders and consumer advocates opposed this proposal as too restrictive.​​​​



Questions? Please contact Joe Pigg for more information.