A letter signed by 163 congressmen urges federal regulators to loosen the definition of a "qualified residential mortgage," allowing single-family loans with low downpayments and private mortgage insurance to be exempt from pending risk retention rules.
Reps. John Campbell, R-Calif., and Brad Sherman, D-Calif., began circulating the "Dear Colleague" letter in early May. They finally sent the correspondence to the heads of six regulatory agencies working on the risk retention rule Wednesday.
The letter points out that incorporating a 20% downpayment requirement in the QRM definition would reduce the availability of affordable mortgage money to creditworthy borrowers and reduce demand for housing at a time when the housing market is already facing challenges. "We urge you to revise the proposed rule to reflect the intent of Congress by including prudently underwritten privately insured loans within the QRM definition," the letter says.
The comment period on the risk retention ends June 10. Industry groups have requested a 60-day extension of the comment period, but so far their pleas have been ignored.
The Campbell/Sherman letter does not request an extension of the comment period.
