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Comments Due Today on the Future of Homeownership

Adam Rust's picture

Posted August 1, 2011

Comments are due today (August 1st) on the proposed rules that would make twenty percent down the "new normal" for buying a home.

In March, five regulatory bodies proposed a new rule that would interpret the Dodd-Frank law on how to restore safety and soundness to mortgage lending. Dodd-Frank said that banks needed to be forced to retain some of the risk on their

The Qualified Residential Mortgage Debate

Adam Rust's picture

Posted November 30, 2010

The Dodd-Frank bill requires lenders to retain a five percent risk-retention in loans sold to the secondary market.  It is an idea driven by the lessons that we learned from the financial crisis. Give banks a moral hazard by making them hold some skin in the game. It is hoped that they would then respond by not making unsustainable loans.

The bill gives regulators some time to decide how to implement that requirement. The Dodd-Frank bill does offer some guidance. The Merkley Amendment sets an expectation that lenders will hold a five percent stake in any "qualified residential mortgage."   A "QRM," as it known, needs risk retention.  An exempted loan does not.

First Thoughts

This is a classic example of a rule that could have unexpected consequences. At first glance, it seems like common

Why HMDA Data Needs to Change

Adam Rust's picture

Posted August 26, 2010

The Dodd-Frank bill will require lenders to disclose more data about their lending, but the fundamental problems with HMDA remain largely unresolved. Dodd-Frank says that it will collect, and then disseminate, the following new categories within an updated HMDA by no later than 2012:

  • age of borrower
  • borrower credit score
  • total points and fees payable at origination
  • the spread between the loan's interest rate and the corresponding treasury note of similar maturity
  • value of the collateral pledged against the loan
  • non-amortizing loan features
  • length before loan reset (months)

Those are some good ideas. I think that there is going to be a substantial discussion about

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