Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Securitization Market Awaits QRM Standards

housingwire.comJanuary 24, 2013

By Christina Mlynski

With the Consumer Financial Protection Bureau's qualified mortgage rule now in place, the private label market awaits the release of the federal regulators' Qualified Mortgage Rule.

The shape of QRM will determine if the nation can sustain a healthy securitization market, consumer discretionary analyst Jon Woloshin at UBS ($17.12 0%) said.

"We don't know where that stands, and we certainly hope that we'll get clarity on that. But as we noted, the balance for regulators is the balance of keeping skin in the game and not putting access risk on, versus making the QRM rule so stringent that it basically shuts out people willing to securitize mortgages," he said.

The QRM standard is a potential subset of the QM rule, with QM linking both together. Woloshin notes the terms in QRM cannot be any more liberal than what is defined in the QM rule.

However, if QRM is more restrictive than the QM rule, certain qualified mortgages that do not meet the QRM standards will have to comply with the risk-retention guidelines and keep an actual stake in the loans sold off into securitization, executive vice president Bob Davis of the American Bankers Association said.

"Our view from the very beginning is that once you establish properly the QM definition, those loans within that definition are not going to have the risk characteristics that lead to consumer default," he said. "Once you have QM properly defined, there's no reason to have a QRM more restricted than what’s in QM. So our position is, there should be no difference between QRM and QM."

In regards to the qualified-mortgage rule, Davis said QM is going to result in a much homogenous pool of mortgages to go into securities, which will be true whether they’re going through government-related programs such as Fannie Mae and Freddie Mac or if the private-label market develops and takes off.

"So that is good from a stand point of investors because more information will be available about the loans pools, which are coming from market practice and regulation going forward," he said.

However, a looming risk for investors in regards to the QM rule is the cap on origination fees of 3%. This would make it very difficult for the mortgage broker at the expense of the larger underwriter – basically doubling fees, Woloshin noted.

Similarly, global securitized products strategist Vishwanath Tirupattur at Morgan Stanley said while the QM rule is mainly positive, one issue analysts raised concerns about was the 3% cap on total mortgage fees as well as higher costs on due diligence, resulting in 'higher costs on lending.'

Another concern Morgan Stanley analysts addressed is the QM rule's distinction between a loan that has a safe-harbor from future ability-to-repay litigation and the rebuttable presumption standard. Morgan Stanley believes the rebuttable presumption standard is less-than-ideal in its current form.

The safe-harbor standard applies to lower-risk loans that meet all of the QM requirements.

The second-type of QM comes with a rebuttable presumption of safe lending and applies to higher-cost loans. This loan type is presumed safe for the most part, but can still be challenged on narrow grounds in court later on.

"Under the CFPB's final ability-to-repay rule, a qualified mortgage that is not a higher-priced loan will be entitled to safe harbor, and a qualified mortgage that is a higher-priced loan will be entitled to only a rebuttable presumption of compliance. As a result, the market for higher-priced mortgage loans may be limited, at least initially," Ballard Spahr noted.


Back to January 2013 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:




 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.


     
 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2007-2016 Certified Forensic Loan Auditors ™ All rights reserved