Subject: File No. S7-14-11
From: Jennifer L Reich
Affiliation: Loan Officer

April 22, 2011

What are potential risks to the Real Estate community and consumers. Some analyst have calculated the the 5% risk retention will be booked as a capital charge to the lender and securitizer which will cause a ripple effect in pricing of these loans. The mortgage interest rate increase is projected at lease 3/4 of a point to 3 points higher than today if the loan does not meet the QRM standards.
Potential hazards of current definition of QRM:
When and if Fannie Freddie go private as the current administration is pushing?
So think about the consumer who has a Jumbo loan and their home has lost value and cannot refinance because of LTV.
What about a client who had mortgage insurance and LTV is higher than 75%?
What about the first time buyer? FHA is now 1% upfront rolled onto balance of loan, plus 1.15% per month cost to borrowers. Current rule would not take PMI into consideration.
Doesnt Mortgage Insurance and additional underwriting help ensure loan quality even under higher LTVs?