U.S. regulators will soon propose a softened version of the Qualified Residential Mortgage rule that would require lenders to share the risk in some mortgages
U.S. regulators will soon propose a softened version of the Qualified Residential Mortgage rule that would require lenders to share the risk in some mortgages, according to a Bloomberg report.
The first version of the rule, proposed in 2011, would have required lenders to keep a stake in loans in which borrowers were spending more than 36% of their income on all loan payments. That version, however, drew the ire of housing industry players and consumer groups when it was proposed.
Citing sources who requested anonymity, Bloomberg reported Wednesday that a new version of the rule would require lenders to hold onto a slice of the risk when borrowers are spending more than 43 percent of their monthly income on all their debt. The rule will apply to mortgages backed by Fannie Mae and Freddie Mac, Bloomberg reported.
The official proposal is set for the last week of August, according to Bloomberg. The agencies involved in crafting the rule are the Department of Housing and Urban Development, the Federal Housing Finance Agency, the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Federal Reserve and the Federal Deposit Insurance Corporation.
Each agency will seek public comment before holding a final vote on the rule, Bloomberg reported.
