The SEC, Federal Reserve Board, OCC, Department of Housing and Urban Development, FDIC and Federal Housing Finance Agency (the âAgenciesâ) reassessed several provisions of the Credit Risk Retention Regulation, including (i) the definition of a qualifying residential mortgage loan, (ii) the exemption for community-based residential mortgages and (iii) the exemption for qualifying residential mortgages of three to four units. After completing their review, the agencies have decided not to propose any changes at this time.
Under the Credit Risk Retention Regulations, federal bank agencies are required to periodically review and reassess the definition of a Qualified Residential Mortgage (âQRMâ), taking into account changing market conditions. residential mortgage loans. When reviewing the definition of QRM, agencies confirmed that the current definition of QRM was predictive of lower default rates and did not appear to be a significant factor in credit conditions. Accordingly, the agencies did not propose to change the definition of QRM.
Additionally, the agencies decided not to propose any changes to the exemption for community-based residential mortgages, stating that it serves the public interest by allowing safe and sustainable loans to be made available to communities across the country. low to moderate income.
Similarly, the agencies have decided not to make any changes to the exemption for qualifying residential mortgages with three to four units. The agencies said the underlying properties are a source of affordable housing and, given the small number of mortgages secured by properties with three to four units, the exemption does not appear to stimulate significant speculative activity in the market. securitization.