Credit Risk Retention

10/30/13 Office of the Comptroller of the CurrencyBoard of Governors of the Federal Reserve 400 7th St, SW, Suite 3E-21820th St. and Constitution Ave, NW Mail Stop 9W-1120th St. and Constitution Ave, NW Washington, D.C. 20219Attn: Robert deV. Frierson, Secretary Docket No. OCC-2013-0010Docket No. R-1411 Federal Deposit Insurance CorporationSecurities and Exchange Commission 550 17th St., NW100 F St., NE Washington, D.C. 20429Washington, D.C. 20549-1090 Attn: Robert E. Feldman, Exec. SecretaryAttn: Elizabeth M. Murphy, Secretary RIN 3064-AD74File Number S7-14-11 Federal Housing Finance AgencyDepartment of Housing and Urban 400 7th St., SWDevelopment Washington, D.C. 20024451 7th St., SW, Room 10276 Attn: Alfred M. Pollard, General CounselWashington, D.C. 20410-0500 RIN 2590-AA43 Re: Credit Risk Retention Re-Proposal Dear Sirs and Madam: On August 28, 2013, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (the Board), Federal Deposit Insurance Corporation (FDIC), Securities and Exchange Commission (SEC), Federal Housing Finance Agency (FHFA), and the Department of Housing and Urban Development (HUD) (collectively, the Agencies) jointly issued a notice of proposed rulemaking (the Proposal) to implement § 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank or the Act) regarding credit risk retention including the Qualified Residential Mortgage (QRM). The Proposal is a re-proposal of a proposed rule issued in the spring of 2011 on this subject. After intense push-back, the Agencies re-proposed the rule in 2013. The 2013 re-proposal represents an improvement from the original because it aligns the QRM definition with the QM standard finalized earlier this year by the CFPB. •As the data demonstrate, the QM definition sets forth a rigorous standard for sustainable mortgage lending which result in borrowers' ability to repay and significantly lowers delinquencies and defaults; •Aligning the QRM and QM definitions will allow a greater number of borrowers to benefit from lower mortgage costs resulting from greater access to the private investor market, as well as safer and more sustainable loans; •Aligning the QRM definition with the QM standard will streamline the regulatory burden on an industry where the costs of regulation have become a great concern; and •The respective legislative intent of QRM and QM are well satisfied by the Agencies adoption of the same definition. Despite the improvements, we have several concerns with the re-proposal. In particular, we are very concerned with the Alternative QM-Plus Approach. This Alternative would require a loan qualifying for the QRM exemption to have a 30% down payment and subject the borrower to onerous credit history requirements. The following are just some of the arguments against the Alternative: •The Alternative's inclusion of a down payment requirement is inconsistent with the legislative intent; •The Alternative restricts too many consumers' access to the most affordable credit available; •The Alternative would exclude a greater number of minority borrowers from the most competitive loans than the Preferred Approach; •The Alternative is unnecessary because the investor market can easily ascertain and price transparent credit attributes like loan-to-value ratio (LTV); •The Alternative will raise costs to borrowers. Consumers who do not qualify for QRM will pay higher prices for ever-scarcer private label credit; and •The Alternative of a more restrictive QRM will increase Government and agency involvement in the mortgage market when the Government's footprint and risk should be reduced. We appreciate your consideration in this as the Indiana Mortgage Bankers Association is very concerned with meeting the needs of our citizens in regard to their housing finance needs in the future. With the rates going up and the guidelines fo…

Please find attached our comments.

Filed on regulations.gov — full text not in the inline record.