Six federal regulatory agencies are commencing a mandated review of the Dodd-Frank Act’s mortgage risk retention rule, which was finalized in 2014. As part of the review, the agencies are seeking public feedback on the qualified residential mortgage definition as well as the exemptions to the risk retention requirements for Qualified Mortgages and for “community-focused residential mortgages” (such as those made by community development financial institutions).
Specifically, the agencies sought public feedback on the evolution of the mortgage and securitization markets, the structures of securitizations, the evolving roles of parties to mortgage transactions, implications for investor protection and financial stability, mortgage product trends and how the QRM definition is affecting home loan underwriting and securitization. The agencies also sought information on the effects on the risk retention rule of potential changes to the Consumer Financial Protection Bureau’s QM definition, which is aligned with the QRM standard. Comments are due by Feb. 3, 2020.