Could you qualify for a 'Qualified Residential Mortgage?'

Payday loans' debt treadmill

Borrowers who qualify for a "Qualified Residential Mortgage will pay less than for a mortgage that is not designated as a QRM (Some analysts estimate that mortgage rates on non-QRMs could rise by as much as three percentage points.), but it won't be easy.

by Broderick Perkins
© 2010 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - If you think mortgage money is tight right now, get a load of what could be coming.

On Capital Hill legislators, lobbyists, real estate industry experts and others are wrangling over Mortgage Reform and Anti-Predatory Lending Act provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Among the most discussed provisions is one that would create a Qualified Residential Mortgage (QRM), one that will be viewed as a loan offering a lower risk of default.

Dodd-Frank requires banks and other firms that issue mortgage-backed securities to keep 5 percent of the loans that they bundle and sell as securities. The idea is for banks to retain some of their mortgage based risks.

Perhaps, if banks previously had been required to hold onto some of their securities, Wall Street wouldn't have crashed under the weight of the toxic investments.

In any event, anything that regulators deem a QRM would be exempt from the 5 percent rule.

Because of the low risk, borrowers who qualify for a QRM will pay less than for a mortgage that is not designated as a QRM (Some analysts estimate that mortgage rates on non-QRMs could rise by as much as three percentage points.), but it won't be easy to land the loan.

According to the proposed definition borrowers would have to:

• Put at least 20 percent down to buy a home.

• Have at least 25 percent in equity to refinance.

• Have at least 30 percent equity to do a cash-out refinance.

• Have house payments that don't exceed 28 percent of before-tax income, and total monthly debt payments (house, credit cards, auto, student loans) couldn't exceed 36 percent of before-tax income.

• Not have been 60 days delinquent on any debt payments in the last two years.

There's some confusion about how much the QRM issue will impact the housing finance market.

Mortgage giants Fannie Mae and Freddie Mac back more than nine in 10 of new loans and those loans are already exempted from current risk-retention requirements and will likely satisfy further risk retention requirements.

However, the National Association of Realtors says high down payment requirements will burden home buyers and, as such, impede the economic and housing recovery.

"We need to strike a balance between reducing investor risk and providing affordable mortgage credit. Better underwriting and credit quality standards have greatly reduced risk," said NAR President Ron Phipps.

"Adding unnecessarily high minimum down payment requirements will only exclude hundreds of thousands of buyers from home ownership, despite their creditworthiness and proven ability to afford the monthly payment, because of the dramatic increase in the wealth required to purchase a home," said Phipps, also broker-president of Phipps Realty in Warwick, RI.

NAR, along with the Center for Responsible Lending (CRL), National Association of Homebuilders (NAHB), and the Consumer Federation of America (CFA) sent a joint letter to federal regulators, urging them to avoid arbitrary high down payment requirements on mortgage loans.

"Instead, regulators should adopt standards for core underwriting factors to lower the risk of default. These include strong loan documentation, assessing a borrower's ability to repay, reasonable debt levels, and prohibitions on high-risk loan features," CRL says.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Under the DeadlineNews Group umbrella:

Perkins is managing editor of HomeAway.com's Gulf Coast Response Center.

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
• National Real Estate Examiner
• National Consumer News Examiner
• National Offbeat News Examiner

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Real Broderick, Please Stand Up

After a local television news outlet confused journalist Broderick Perkins with a dead actor, the Deadline Newsroom set out to set the record straight -- for about the zillionth time -- because getting it right is supposed to be the hallmark of journalism. And it's the kind of drivel that's just perfect for a blog.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime.



Deadline Newsroom - Deemed a "real estate expert," journalist Broderick Perkins, founder and owner of DeadlineNews.Com, was recently interviewed by an NBC11-Silicon Valley reporter working up a story about local housing market conditions.

When the interview aired, Perkins enjoyed a plug for his "News that really hits home" DeadlineNews Group real estate news service, about five seconds of fame, and the publicly televised horror of once again being named "Broderick Crawford!"

"Broderick Perkins" isn't a household name, but given previous cases of mistaken identity, here's a little something to keep the media's record straight.

First, the guy in the photo above is not Broderick Crawford. Obviously, you can't always believe what you see on TV.

And the guy below holding what suspiciously looks like a fatty? He's not Broderick Perkins. No resemblance, except his first name.

Born William Broderick Crawford, without a "Perkins" anywhere in his name, Crawford moved his middle name to first place and dropped the Hollywood-unfriendly "William."

Crawford was an Oscar-winning actor, but best known for his role as a crusty, but benign cop on the road in the unforgettable (much to Perkins' long lasting chagrin) TV series "Highway Patrol." It was always announced as "Broderick Crawford and The Highway Patrol." Crawford's been dead since 1986. Probably of lung cancer. Perkins is still around. For now. So enjoy him.

Trivia: This is no excuse for getting it wrong, but the real Broderick Perkins was actually named after Crawford (his middle name, which became his first name), because Perkins' mom was an avid early TV series fan, as were many of her generation. The real Broderick Perkins did some summer stock in Williamsport, PA; performed scenes in federal pens (not as a con); and performed in college theater, all of little note, but the work did help give him skin thick enough to deal with years of persistent moniker mistakes -- like the most recent one on affiliate network news television. Or maybe not.

"Aren't those guys supposed to check their facts? Derrrrrrrrrrr!" said the real Perkins.

Next, this slugger is also not Broderick Perkins.

Born Broderick Phillip Perkins, he retained his middle name without moving it around. He was a top rookie Major League Baseball player, first for the San Diego Padres, but stopped playing in 1984. The real Broderick Perkins couldn't hit a baseball with the side of a barn, but he does have all of BPP's baseball cards, thanks to fans (of baseball and hack writing), practical jokers and others who, well, think all Brodericks look alike.

The real Broderick Perkins has a signature just as bad as the ball player, and can only hope that the Broderick Perkins with the middle name Phillip gets as many cases of mistaken identity as he does.

Okay? So this(below) is your real Broderick Perkins. There are two photos of him, as featured on TV, one at the top of this story and one below, so you know.

Better looking than both those other Brodericks, Broderick Perkins is the real estate writer, realty news expert and winner of many journalism awards (not as shiny as Oscars) including a team effort Pulitzer Prize for General News Reporting granted to the Mercury News' coverage of the Loma Prieta Earthquake in 1989. Perkins covered housing as part of the team effort.

Try to remember. He's a newsman, not an actor, not a baseball player.

The story here is "Get your Brodericks straight." We Brodericks all have an uncommon given name, but other memorable characteristics. Don't confuse us. We caught enough hell as kids. Each Broderick is unique and special in his (We've yet to find a female "Broderick") own right, probably because of his name.

By the way, "Broderick" is an Old Welsh, Old English name meaning famous power, son of the famous ruler, from the broad ridge (a seat of power) and son of Roderick (Broderick Perkins is also often mistakenly short changed and called "Roderick" mostly because of someone who just doesn't pay attention.)

Don't mess with the power of the Broderick.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's where all the news really hits home.

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