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Regulators Re-Propose Dodd-Frank QRM Rule More Flexibility for Skin in the Game

September 03, 2013

By THE GLOBAL BANKING AND PAYMENT SYSTEMS PRACTICE

The client alert discusses the re-proposed credit risk retention or "Qualified Residential Mortgage" (QRM) Rule, issued by six federal agencies, that requires real etstate fund sponsors to retain a designated amount of "skin in the game" in certain types of real estate securitizations. The alert discusses re-proposed risk retention requirements that provide additional flexibility to securitizers for the options for satisfying the risk retention requirement. In addition, the alert highlights revisions made to the exemptions from the rule, including a proposal to align the QRM exemption with the CFPB's qualified mortgage (QM) rule, as well as a proposed alternative QM-plus approach for which the agencies are requesting comment. There are more than 100 questions raised by the agencies (attached in the appendix to the alert), and comments are due on the re-proposed rule October 30, 2013.