Even amid the flurry of regulatory changes already happening this month, the housing industry wonders if a minimum down payment for home loans is next in line, according to an article from Bloomberg.
With the final version of the Qualified Residential Mortgage rule expected to arrive in the next few months, the article suggests that regulations in underwriting and servicing could “reshape who can lend and who can borrow.”
David Stevens, president of the Mortgage Bankers Association, said that the “regulatory tidal wave” has finally come and that “these changes will impact business operations and the future of mortgage access for years to come.”
Requiring lenders to verify borrowers’ ability-to-repay, the Consumer Financial Protection Bureau’s (CFPB) Qualified Mortgage rule did not include a minimum down payment requirement.
Loans with a 10% down payment, instead of 20%, would be the “politically expedient course to take,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, in an interview with Bloomberg.
There is also uncertainty as to what will be included in the QM rule’s provision of capping fees at 3% of the loan amount.
Even with mortgage credit already tight, the article assures that there are still more rules coming, and that the full impact on lending will become clear once all regulations have been issued.
Written by Jason Oliva