Mortgage Bankers Association (MBA) chief executive David Stevens, noting the current 20 percent downpayment requirement is “a direct attack on first-time homebuyers, African-American borrowers and Latinos”, says it will make it more difficult to attract teachers, firefighters, and healthcare workers to new jobs in communities. NationalMortgageNews tells MHProNews.com Stevens says banking regulators want the QRMs (qualified residential mortgage) requirement, that it is not part of Dodd-Frank legislation. According to the MBA, 80 percent of first-time home buyers have downpayments of less than ten percent. Given the uncertainty of the future of Fannie Mae and Freddie Mac, it is vitally important that a private mortgage securitization process be developed. Dropping the down payment and debt-in-income requirement would insure that only owner-owner occupied, fully documented, and fully amortizing mortgages would be exempt from the five percent risk retention restriction.
(Photo credit: Mortgage Bankers Association)