'Qualified mortgages' to be exempt from new risk requirement

June 1st, 2010

Written by Greg Frost Jr.

Categories: Branch Partner Opportunities, Federal Housing Administration, FHA, Home sales, Homebuying, Mortgage / Credit, Mortgage Banker News, Mortgage Guidelines, Mortgage Insurance, Mortgage News, Mortgage rule changes, Mortgage rules, Net Branch Opportunities, News, Real Estate News

The recent “Wall Street Reform” bill required that 5 percent of a mortgage be retained as a buffer against risk. Fortunately, as National Mortgage Newsreports, a measure passed in May amended that requirement to exempt “qualified mortgages” (subscription required)–those that are generally fully documented and include 20 percent down and mortgage insurance. We agree with Sen. Johnny Isakson, one of the co-sponsors of the bill, who said, “Risk retention is not the cure-all for good lending–underwriting is.”

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