Sarasota Real Estate Market News

20% downpayment not a QM requirement

WASHINGTON – Sept. 17, 2012 – Realtors and other housing groups worry that new rules now under development will make it more difficult for homebuyers, particularly first-time buyers, to obtain a mortgage. However, at least one fear seems to be unwarranted for the moment.

The Consumer Financial Protection Bureau (CFPB), created to oversee credit companies in the U.S., is developing a QM (qualified mortgage) code. An industry fear voiced by the National Association of Realtors® (NAR) and others was that the rules, once announced, would require a mandatory 20 percent downpayment, which would bump many homebuyers from the market and force others to wait years to qualify for a home.

In testimony before the Senate Banking Committee on Sept 13, however, CFPB Director Richard Corday said a 20 percent downpayment was not under consideration.

The issue is not yet finalized. Two federal groups are working independently on separate mortgage qualification rules. The Federal Reserve plans to issue its own qualified residential (QRM) code that, while similar, is unrelated to the QM code. In the past, Fed regulators have suggested a 20 percent downpayment rule.

© 2012 Florida Realtors®

October 23, 2012 - Posted by | News related to Buyers, News related to Financing

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