QRM on the Hot Seat

News Commentary:”‘Qualified Residential Mortgage’ on the Hot Seat,” Mortgage News Daily, July 29, 2011.

Per this article (click here to download PDF) the subject of QRMs and the 5% could prove to be a major issue for “hard money” mortgage brokers and hedge funds that are less than $1 billion in assets under management. It is not clear where the cutoff will be in volume threshold requiring the application of the 5% retention rule.
Unless the threshold is at least $100 million or more, this could prove to be the demise of many small to moderate sized “hard money” mortgage brokers. The surviving industry will be left with the multi-lender rule and very small private placements as a vehicle to use to raise capital.
The case is interesting because it again addresses kickbacks and unauthorized referral fees.

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