Builder Blog

As regulators explore down payment increases on mortgages, opposition comes forward fearing many will be priced out

The Coalition of Sensible Housing Policy recently released a white paper expressing broad concerns about establishing a 10 percent to 20 percent down payment requirement to meet Qualified Residential Mortgage (QRM) standards.

As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, regulators have explored several ways to prevent homeowners from defaulting on their loans. Buyers who are unable to make the QRM down payment would be subject to a more expensive mortgage, in some cases two points higher than the standard rates.

The coalition worries that even buyers with strong credit ratings could be priced out of the market:

Responsible consumers who maintain good credit and seek safe loan products will be forced into more expensive mortgages under the terms of the proposed rule simply because they do not have 10 or 20 percent in down payment or even more equity for refinancing. These mortgages will be more expensive for consumers because the capital and other costs of retaining risk will be passed onto them, if the private market chooses to offer loans outside of the QRM standard at all. In other words, the proposal unfortunately penalizes qualified, low-risk borrowers.

The National Association of REALTORS distributed the chart below, which depicts the potential affect increased down payments could have on the average American family.

In the shadow of the lending crisis, do you think increased down payments will decrease defaults or will most Americans be priced out of the housing market? How might these changes impact your business?

Share this Article

Categories: business, housing

Add a Comment

This site is not an official Marvin customer service forum. We are unable to discuss specific customer concerns in this space, so if you have a question or need support, please visit our Contact page. All comments will be moderated to help keep out spam, profanity and other inappropriate material. We'll work to make sure your comment is posted as soon as possible, but please forgive us for any delays.

Please leave these two fields as-is:


Welcome to the Builder Blog

We're here to share industry news and trends, report on best practices, review helpful case studies, and conduct interviews with experts from a variety of disciplines -- all with the goal of helping you uncover something that will help you do your work just a little bit better.

As we share these resources, we hope you’ll share some with us, too, by offering your own comments on our posts or submitting your own ideas, videos, photos, case studies or guest posts to be published on here the Builder Blog.