Federal agencies have released a revised Risk Retention Proposal, which includes a revised definition of a Qualified Residential Mortgage (QRM).
Under the proposal, a QRM would meet the same criteria as a Qualified Mortgage (“QM”) under Regulation Z. This would exempt QM’s from the risk retention requirements.
Comments are due by October 30, 2013. Among the items the Agencies are seeking comment on is an alternative QRM definition (“QM-plus”). Such an approach would start with the QM criteria and add additional requirements related to occupancy, lien status, credit history, and loan to value. This approach would likely result in significantly fewer QRM loans.
We’ll be following the progress of this proposal and let you know of necessary updates as we become aware of them.