Debate continues over including a 20 percent down payment requirement in new regulations defining "Qualified Residential Mortgages" (QRMs) under the Dodd-Frank Wall Street Reform and Consumer Protection Act. A QRM would be exempted from the rule requiring lenders to retain a 5 percent interest in each mortgage it securitizes; a policy called "risk retention."
The Community Mortgage Banking Project (CMBP) released a report Thursday criticizing such a down payment requirement because, among other reasons, it would be good for mega banks. And how do we know the report asked; because Jamie Dimon told us so! Dimon, CEO of JP Morgan Bank was quoted in a recent report from Citigroup as saying that such a requirement could ultimately end up as a positive for the larger players such as JP Morgan and Wells Fargo given they have the scale to hold the 5 percent of non-qualifying mortgage on their balance sheet.
Glen Corso, managing director of the CMBP said "Today, the three largest banks - JP Morgan, Wells Fargo and Bank America - account for more than half of the mortgage lending in the country. A 20 percent down payment requirement as part of the QRM will simply accelerate that concentration while making loans more expensive for responsible borrowers. This is not what the Dodd-Frank Act reforms were supposed to do."
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Source: http://www.mortgagenewsdaily.com/03172011_dodd_frank_act_qrm.asp
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