Certain rule-makings under Dodd-Frank, including the qualified mortgage rule and Basel III standards proposed by the Federal Reserve, are not only leaving industry professionals uncertain as to the future but may also hinder a struggling housing market.
Ken Trepeta, the director of real estate services for the National Association of REALTORS, said that the Qualified Mortgage and Qualified Residential Mortgage, in addition to Basel III standards, could severely hamper the housing market, RISMedia reports.
“It is unfortunate that four years since the Fannie and Freddie conservatorships and over two years since Dodd-Frank, we still do not have a ‘QM’ or qualified mortgage definition to define permissible lending in this country, and from my perspective, an equally important ‘QRM’ or qualified residential mortgage defining a high quality mortgage for securitization that would be exempt from risk retention,” Trepeta said, according to RISMedia. “What we need are clear, transparent, understandable rules of the road that investors, lenders and consumers can abide by and depend upon.”
Trepeta also said that this “trifecta” may also affect housing finance.
“We currently face a very tight lending environment,” Trepeta said, RISMedia reports. “These three rules all have the potential to seriously affect future lending. It is critical that regulators get these rules right. Not just for future homebuyers and homeowners, but for the economy in general.”