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Fitch: Final QM Rule to Shape Future Market

While the mortgage market continues its slow trod toward recovery--with distressed liquidations and delinquencies on the decline--industry participants await the final word from lawmakers on one key issue affecting the future of their businesses.


The ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ has expressed its intent to announce its final decision on what constitutes a qualified mortgage this year. This, in turn, will give the industry some insight into what can be expected to define a qualified residential mortgage (QRM), according to ""Fitch Ratings."":http://www.fitchratings.com/web/en/dynamic/fitch-home.jsp

""Finalization will, at a minimum, provide clarity to the market and allow institutions, particularly banks, to assess the costs of re-entering the market,"" said Suzanne Mistretta, senior director at Fitch.

In addition to anticipated announcements regarding the QM and QRM, Fitch said ""key announcements"" from the ""Federal Housing Finance Agency"":http://www.fhfa.gov/ ""are supportive of a housing and mortgage market recovery.""

Those ""key announcements,"" according to Fitch, include new guidelines for representations and warranties and a streamlined short sale process.

Meanwhile, ""[i]nventory is declining and distressed liquidations have sharply dropped while mortgage delinquencies are improving for most sectors,"" Mistretta said.

Despite the overall positive movement in markets across the country, a closer look reveals some markets continue to outpace others.

Detroit, Phoenix, and Atlanta have improved markedly, while New York and New Jersey are still hindered by ""a backlog of distressed inventory and long liquidation timelines.""


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