Risk Retention Resource Center

MBA's Risk Retention Resource Center is the best source for information about risk retention as it relates to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). This page will keep you up to date on the recent proposed rulemakings on this topic as they relate to residential and commercial real estate finance.

June 7, 2011: QRM/Risk Retention Comment Period Extended

Federal banking agencies yesterday issued an extension to a comment period on controversial proposed rules to implement credit risk retention requirements required by the Dodd-Frank Act. The comment period now ends August 1; the original deadline had been this Friday, June 10. The Mortgage Bankers Association, other industry trade groups and consumer advocacy groups had pressed the agencies to extend the comment deadline. MBA President and CEO David Stevens said additional time was necessary for lenders, servicers and other stakeholders to analyze the proposed rules’ full scope and potential impact.

"MBA is very pleased that the regulators decided to allow more time for stakeholders to better understand the full scope of the proposed rules and how they will affect borrowers and lenders. While not having an immediate short-term impact, these rules will have a profound long-term effect on how we finance residential, commercial and multifamily real estate in this country. For example, the Qualified Residential Mortgage (QRM) will define who will and who will not get the most affordable mortgage products, potentially prohibiting a significant segment of qualified borrowers from being able to achieve homeownership. For commercial and multifamily real estate transactions, these rules will affect the flow of private capital back into those markets. Allowing more time for comment will enable us to prepare a more thoughtful and comprehensive analysis and response, which should help the regulators craft a final rule that meets both the intent of the legislation and the best interests of stakeholders,” said Stevens.

MBA encourages its members to Credit Risk Retention (Document ID FRS-2011-0108-0001)'">submit comments on this rulemaking (information on right) as well as to urge their members (click "Take Action" and follow instructions) of Congress to contact the six federal financial regulators (FDIC, Federal Reserve, OCC, HUD, FHFA, and the SEC) and urge them to remove the rigid down payment, loan-to-value (LTV) and debt-to-income (DTI) requirements included in the proposed Qualified Residential Mortgage (QRM) definition in the proposed risk retention rule.

June 6, 2011: MBA Briefs Congressional Staffers and Media on Risk Retention Rules

Last week a coalition of industry and consumer advocacy groups, led by MBA, conducted three briefings, to the U.S. House, U.S. Senate and the media, on the proposed Qualified Residential Mortgage (QRM) rule that would provide an exemption from the Dodd-Frank Act's risk retention provisions. MBA and its partners will continue to meet with regulators responsible for the rule this week to express concern about the overly restrictive underwriting requirements in the QRM rule that will limit access to the most affordable mortgage credit for many qualified borrowers. Coalition partners include Center for Responsible Lending, the Consumer Federation of America, the National Community Reinvestment Coalition and the National Housing Conference.

View the presentation.

May 13, 2011: MBA Submits Joint Letter to Regulators on Risk Retention Comment Extension

Read the letter.

April 14, 2011: MBA Testifies on Risk Retention
Henry V. Cunningham Jr., CMB, 2011 Chairman of MBA’s Residential Board of Governors and member of MBA’s 2011 Board of Directors testified in front of the House Financial Services Committee Subcommittee on Capital Markets and Government Sponsored Enterprises. Hank's testimony focused on the proposed regulations to implement the credit risk retention provisions of Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Read the testimony.

April 14, 2011: MBA Releases White Paper on QRM
Along with the Center for Responsible Lending, Community Mortgage Banking Project, Mortgage Insurance Companies of America and the National Association of Homebuilders, the Mortgage Bankers Association released a white paper titled "Proposed QRM Harms Creditworthy Borrowers And Housing Recovery." Read the paper.

March 30, 2011: MBA Provides Summary of Risk Retention Rule
MBA released a summary of the FDIC's recently proposed risk retention rule. Read the residential summary. Read the commercial summary.

March 29, 2011: Dodd-Frank Risk Retention Rule Released
The Federal Deposit Insurance Corporation (FDIC) released a proposed rule that would implement the risk retention provisions of Dodd-Frank for residential and commercial mortgage-backed securities including an exemption from these requirements for qualified residential mortgages or QRMs. During the next week other agencies are expected to adopt and offer the same proposal for public comment. Once the proposal is published in the Federal Register, it will provide 60 days for public comment period. MBA will work closely with its members and other stakeholders to respond to this proposal. Read the proposed rule. Read MBA's press release.

Read MBA's Risk Retention Issue Briefs (single-family perspective or commercial/multifamily real estate finance perspective) to learn more about MBA's position on this topic.

MBA Responds to Dodd-Frank Rulemakings Related to Risk Retention

Date Filed Letter Topic
04/14/2011 MBA Testimony on Risk Retention Risk Retention
11/22/2010 MBA Letter to Treasury, Federal Reserve, HUD, VA and USDA on QRM and QM Synchronization Risk Retention, Ability to Repay
11/09/2010 MBA Letter to Federal Banking Agencies on QRM Definition Risk Retention
10/07/2010 MBA Letter to Federal Reserve on Risk Retention Study Risk Retention

Related Information:
Financial Regulatory Reform Resource Center (Dodd-Frank)

MBA Member Action Needed
Submit Comments on Risk Retention Before August 1, 2011
The deadline for submitting comments to the federal regulators about the proposed risk retention regulations has been extended and now ends on August 1, 2011. MBA believes these regulations and the structure of the proposed Qualified Residential Mortgage (QRM) exemption will affect who can and cannot buy a home for years to come. Considering the gravity of this rule and the many concerns it raises, we urge you to submit your comments to the federal regulators charged with finalizing the rules. Your comments are important and could shape the final outcome of the regulations. MBA plans to submit a formal letter on behalf of the entire housing finance industry, but previous rulemakings have shown that comments from individual practitioners carry significant weight.

MBA has made it easy for you to submit your comments electronically.

To submit your comments click on the following link:

Credit Risk Retention (Document ID FRS-2011-0108-0001)

Feel free to review the other materials on this MBA Risk Retention Resource Center to help you formulate your comments and opinions. In particular, it is suggested that you consider commenting on the narrow restrictions of the QRM criteria, the mortgage servicing provisions, and the premium capture cash reserve account.