CAI is working to ensure that residents of community associations have access to fair and affordable mortgages through our engagement with Congress and federal agencies on the development of Qualified Residential Mortgage (QRM) regulations.
In 2010, Congress passed the Wall Street Reform and Consumer Protection Act (also known as the Dodd-Frank Act). Included in the law are provisions that require seven federal agencies to draft regulations to set new standards for mortgages. These regulations will change the rules of the game as to who gets a mortgage, for what type of home, in what type of community on a scale not seen since the 1930s. When finalized, the regulations will impact nearly all lending decisions. CAI is working to ensure that any criteria for loan qualification in community associations are based on stakeholder input and industry best practices.
QRM FAQ
QRM Regulations Webinar
CAI activities to date:
CAI Mortgage Teams Deliver a Message to Congress (8/2011) In July, CAI set a goal of working with state LACs to target 40 members of the House Financial Services Committee and the Senate Banking Committee. LAC appointed “Mortgage Matters Teams” were empowered to set up visits with targeted members to discuss three key issues, FHA condominium underwriting standards, Qualified Mortgage Rules and Qualified Residential Mortgage Rules. All of these federal proposals have the potential to have a substantial negative impact on access to affordable and fair mortgages for residents in Community Associations. So far state LACs have met with close to half of the targeted members during the month of August! Read more...
CAI Files Comments on Qualified Residential Mortgage Regulations (8/2011) CAI has filed extensive comments on proposed federal regulations defining Qualified Residential Mortgages (QRM). These regulations are the result of the Wall Street Reform and Consumer Protection Act of 2011. The law made important changes to the types of mortgages lenders will be able to offer consumers. Along with proposed regulations governing Qualified Mortgages (QM) the QRM regulations will have a substantial impact on the types of mortgages available and the standards that apply for future borrowers. Read more...
CAI Files Comments on Qualified Mortgages (7/2011) CAI has filed extensive comments on proposed federal regulations defining Qualified Mortgages. These regulations are the result of the Wall Street Reform and Consumer Protection Act of 2011. The law made important changes to the types of mortgages lenders will be able to offer consumers. These loans are called Qualified Mortgages or QM. QM regulations focus on a borrower’s ability to repay a mortgage. The draft regulations will include mandatory payments associated with a mortgage in qualifying applicants. This will include association assessments. The government also sought comment on the impact of special assessments and transfer fees on borrowers. CAI provided detailed comments to help ensure that any final regulations do not have a negative impact on community associations. You can read the comment letter here.
CAI Releases Member Survey Report on Mortgage Regulations (6/2011) A report issued by the Community Associations Institute (CAI), shows that residents and businesses supporting community associations are skeptical of proposed federal regulations that would establish new mortgage lending criteria across the country.
Released by a cadre of federal agencies, the proposed Qualified Residential Mortgage (QRM) regulations would dramatically change lending for home purchases. According to mortgage financing experts, only 30 percent of buyers in 2010 would qualify under the proposed lending standard. CAI will use the data from the issued report in comments submitted to the federal government on the proposed regulations. Read More...
CAI Joins Mortgage Coalition (6/2011) For the past few months, CAI has been working with industry groups such as the National Association of Home Builders and the National Association of Realtors to address issues related to changing mortgage rules. Starting with a joint meeting with the FHA Commissioner, CAI has expanded that cooperation by joining the Coalition for Sensible Housing Policy. The Coalition is comprised of more than 40 consumer and industry groups that are united in opposing the proposed, mandatory 20 percent down payment rule and that share the goal of giving American families access to affordable mortgages. Read More...
CAI Introduces New QRM Regulations Webinar (6/2011) CAI has created a new webinar to better explain Qualified Residential Mortgage (QRM) Regulations. During 2011, the rules which determine who gets a mortgage and for what type of home or community will dramatically change. Changes in QRM regulations will impact nearly all mortgages and mortgage qualification criteria. In March 2011, a 300 page draft regulation defining QRM was issued. CAI has created this webinar to educate its member about this proposal and issues affecting QRM Regulations. To watch CAI’s latest QRM webinar, click here.
CAI Surveys Members on Proposed Mortgage Rules (5/2011) CAI has engaged its members for input into shaping the future of mortgages. In response to draft Qualified Residential Mortgage regulations issued by the federal government, CAI has asked its members to weigh in with their thoughts on the proposed new lending standards. The new regulations will reset the rules for mortgages for nearly all homebuyers. In addition to the survey, CAI has put together a short Frequently Asked Questions document to give members background on the standards set by the proposed regulations. CAI will use the data from this survey to help us in our comments to the government on their draft regulation. Read More…
What is a Qualified Residential Mortgage? (5/2011) A Qualified Residential Mortgage refers to new mortgages that will be created as a result of the Dodd-Frank Act of 2010. In an effort to curb the lax lending standards of banks, the Dodd-Frank Act requires that the federal government develop regulations for Qualified Residential Mortgages (QRM). Under the law, a bank will have to retain an ownership interest in any mortgage it issues if that mortgage does not meet the new requirements of a Qualified Residential Mortgage. Because retaining even a portion of a mortgage would impact a bank’s finances, the QRM regulation is likely to have widespread impact. Read More….
Key House Subcommittee Meets to Discuss Qualified Residential Mortgage Proposal (4/2011) On April 14th, the House Financial Services Subcommittee on Capital Markets met to discuss the recent Qualified Residential Mortgage (QRM) proposal released by the federal banking regulators. The Subcommittee is concerned about the impact the QRM proposal will have on homeowners and the housing market. Read More...
Agencies Release Qualified Residential Mortgage Proposal (4/2011) As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, federal banking regulators have released a proposal to create qualified residential mortgages or QRMs. The proposal is more than 370 pages long and seeks input from stakeholders by asking more than 170 questions.
To qualify for QRM status, a mortgage may only be for a principal residence and may not have loan terms such as balloon payments or interest only payments. Borrowers must contribute at least a 20 percent down payment and closing costs (title insurance, lender fees, realtor commissions) must be paid out-of-pocket and may not be financed. Read More...
CAI Joins Stakeholder Groups with Concerns on Qualified Residential Mortgage Regulations (1/2011)
CAI has signed on to a letter urging the federal government to take a studied approach to overhauling the mortgage finance system. Under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, 7 federal agencies were empowered to draft regulations defining Qualified Residential Mortgages (QRM). The goal of developing QRM is to provide strong underwriting requirements and incentives for responsible lending and borrowing. If a mortgage does not meet the requirements established under the QRM regulations, a lender will have to retain partial ownership of the loan. This would be a strong disincentive to lending. For community associations the outcome of the QRM regulatory process could very well determine the future mortgage-ability of units in associations. Read More...
CAI Takes Action on Mortgage Regulations (1/2011)
In 2011, a host of federal agencies will be issuing regulations that will create Qualified Residential Mortgages (QRM). These regulations are required under provisions of the Financial Services Reform Act passed in 2010. Under a provision titled “Risk Retention,” lenders will be required to retain an ownership interest in each mortgage they lend unless the mortgage meets the requirements of a QRM. The effect of this new law will be to reset the rules governing mortgages including mortgage qualifications and lending criteria for properties in community associations. Read More...