Housing Sacramento Magazine reports:
California congressmen directs chairman Bernanke to give clarity on QRM helping Sacramento real estate
Federal Reserve Chairman Ben Bernanke spoke on February 27, 2013 at a hearing of the House Financial Services Committee. His points about the economy and the need for continuing fed actions made the markets move and helped to clarify the fed’s direction in the future.
The big news for Sacramento real estate is when Chairman Ben Bernanke answered California’s congressman Gary Miller about qualified residential mortgage or QRM. Basically the chairman said QRM may be difficult if the regulation did include the 20% guidance.
If the new rules for qualified residential mortgage include the 20% down payment provision that could have a dramatic impact in the Sacramento real estate market. Some experts say that the new provisions could add as much as 3% to loans interest.
Congressman Gary Miller getting Chairman Bernanke to say the current rules may be good enough to protect banking stability. It could move leaders to act instead of being paralyzed by the unknown rule changes of qualified residential mortgage.
Background on qualified residential mortgage, is one feature of QRM that deals with loan-to-value ratios, as Dodd-Frank financial-overhaul law stipulates. The issues for regulators are two different proposals: one calling for a minimum 20% down payment and an alternate outlining a 10% down payment and mortgage insurance. Loan-to-value ratio’s regulation could be higher for refinances. Both proposals are much more stringent than today’s requirements.
Housing Sacramento Magazine
Professional insights by
Daniel N. Parisi Jr.
CEO Coffee Real Estate
Contact by [email protected]