Proposed Mortgage Rules Too Harsh: NAHB

Washington, DC, March 31, 2011 -- The National Association of Home Builders hosted a media teleconference today along with other industry and consumer groups and finance experts to discuss the impact that lending rules proposed by the Federal Deposit Insurance Corp. would have on the housing market and larger economic recovery.

The plan unveiled by the FDIC would require a minimum 20 percent down payment for “qualified residential mortgages,” or QRMs, that would exempt lenders from forthcoming risk retention rules under the Dodd-Frank financial reform law passed last year.

It's not surprising that panelists found the lending rules too restrictive.

“Requiring a high down payment would disproportionately harm first-time home buyers, who have limited wealth and on average account for 40 percent of home-buying activity," said Barry Rutenberg, First Vice Chairman, National Association of Home Builders .

"It would take an average family 12 years to scrape together a 20 percent down payment."