April 14, 2011

Joint Statement: Proposed Downpayment Rules Harm Creditworthy Borrowers

Joint Housing Group statement for 4/14/11 Congressional hearing on the Qualified Residential Mortgage

The following statement was issued by the Center for Responsible Lending, the Community Mortgage Banking Project, the Mortgage Bankers Association, the Mortgage Insurance Companies of America, the National Association of Home Builders and the National Association of Realtors in advance of the April 14th House Subcommittee on Capital Markets and Government Sponsored Enterprises hearing on the Qualified Residential Mortgage:

“In the midst of a very fragile housing recovery, the government is throwing a devastating, unnecessary and very expensive wrench into the American dream.  First time homebuyers will have to choose between higher rates today or a 9-14 year delay while they save up the necessary down payment.  And 25 million current homeowners would be locked out of lower refinancing rates because they lack the required 25 percent equity in their homes.” 

“High down payment and equity requirements will not have a meaningful impact on default rates.   But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily high rates.  The government is penalizing responsible consumers, making homeownership more expensive or simply out of reach for millions.  We urge regulators to develop a final rule that encourages good lending and borrowing without punishing credit-worthy consumers.”   

The statement was released in conjunction with an in-depth analysis of the impact of the proposed QRM regulation.  The white paper is available at http://communitymb.com/

The following experts will be testifying at the April 14 hearing and/or are available for media interviews before and after the hearing:

Mr. Kevin Schneider, President, Mortgage Insurance Companies of America
Contact Chris Robichaux at (202) 682-2683 to schedule an interview

Ms. Ellen Harnick, Senior Policy Counsel, Center for Responsible Lending
Contact Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org to schedule an interview

Mr. Hank Cunningham Jr., CMB, President, Cunningham and Co.
Contact Sarah Tinsley Demarest (202) 557-2730 or stinsley@mortgagebankers.org to schedule an interview



About the Center for Responsible Lending

The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.