Mortgage insurer The PMI Group Inc. is pushing for regulators to exempt from their risk-retention requirements loans that have a 10% down payment and private mortgage insurance. The proposed Qualified Residential Mortgage (QRM) rule requires of a 20% down payment for purchase loans.
PMI Executive Vice President and Chief Business Officer David Katkov calls the QRM definition ‘very narrow and restrictive,’ but adds that the company is encouraged that regulators are seeking comment on an alternative definition that would allow for lower down payments.
‘We believe that a requirement for an appropriately sized down payment combined with private mortgage insurance provides a balance of positively influencing lender and borrower behavior while bringing private capital back to the residential real estate market.’ Katkov says. ‘However, we are concerned that an overly restrictive cash down-payment requirement will negatively impact otherwise qualified borrowers and may have unintended consequences that could dampen the nation's housing recovery.’
The rule that was proposed Tuesday allows for a 60-day comment period.
SOURCE: The PMI Group
