What’s Left for the QRM?

In this analysis, we assess the new CFPB standards, focusing in particular on their securitization-market impact. This comes not just from the wide safe harbor granted loans that meet GSE and/or FHA underwriting criteria, but also from the tough stand taken on what otherwise qualifies as a QM. Since Dodd-Frank dictates that QRMs must be at least as tightly defined as QMs and regulators have made clear they want QRMs to be a “gold standard,” the tough QM rules means a particularly picky QRM. We also here take a first look at how the QM will drive banking-agency action on the contentious capital standards for mortgages.

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