Is Risk Rention Proposal Dead?

Intersting article from National Mortgage News this weekend….

I had an interesting conversation on Friday with one key industry player in the risk retention debate. Without giving away any hints on his identity, he relayed this scenario, which I paraphrase for you: FDIC chairman Sheila Bair, a big booster of RR, leaves next month and exits the debate permanently. By August or so legislation is introduced that amends the Dodd-Frank bill and gets rid of the whole concept of risk retention, qualified residential mortgage and its cousin qualified mortgage. In other words this colossal industry headache goes away and mortgage bankers are happy and hopefully consumers will be, too. As for the regulators, I’m sure they have plenty of other issues on their plates. From what we are told, of the six agencies involved in the RR/QRM debate, few of them see eye to eye… As for Bair, the mortgage insurance industry is none too sorry to see her leave. Some MI officials have been griping to me for months that she doesn’t seem to recognize (at all) MI coverage. The irony of this whole matter is that the MI industry introduced the concept of a QRM into the risk retention debate. They just assumed that politicians and regulators would recognize MI coverage. But somewhere along the line the MI industry was shown the door. Funny, how those things work in Washington. 

Could this happen?  This would eliminate a major potential headache for the industry–but others remain. For example, the “ability to repay”proposal and loan officer compensation standards.   Believe it or not, the Dodd-Frank portion of the compensation standards have not been released as of yet…


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