At a news conference on Capitol Hill, the original sponsors of the QRM provision in the Dodd-Frank Act -- Senators Johnny Isakson (R-Ga.) and Kay Hagan (D-N.C.) -- joined Congressmen John Campbell (R-Calif.) and Brad Sherman (D-Calif.) to urge regulators to reconsider unnecessarily high down payment requirements under the proposed QRM rule.
"As the leading advocate for home ownership, NAR firmly believes Congress intended to create a broad QRM exemption," said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.
"Strong evidence shows that responsible lending standards and ensuring a borrower's ability to repay have the greatest impact on reducing lender risk, and not high down payments," he added.
NAR has forged the broad-based Coalition for Sensible Housing Policy, which includes 44 organizations focused on drawing attention to the proposed regulation's onerous 20% down payment requirement. The coalition asked for and recently received an extension of the comment period until Aug. 1.
NAR and its coalition partners have also gathered the support of 44 U.S. senators, who recently wrote to regulators expressing their intent on QRM and opposing the imposition of a sizable down payment; 282 House members signed a similar letter.
Concurrent with the event, NAR and the coalition unveiled a white paper: "Proposed Qualified Residential Mortgage Definition Harms Creditworthy Borrowers While Frustrating Housing Recovery."
An in-depth analysis of the impact of the proposed QRM rule, the white paper will be submitted as the coalition's official comments to the rule.
NAR wants federal regulators to honor congressional intent by crafting a QRM exemption that includes a wide variety of traditionally safe, well documented and properly underwritten products.
"As written, the proposed QRM rule violates congressional intent, makes home ownership more expensive for millions of responsible consumers and jeopardizes the fragile housing recovery," Phipps said. "We urge regulators to reconsider the proposed QRM definition to help hard-working, creditworthy Americans continue to realize their dreams of homeownership."