Corker presses for synching up mortgage rules

A top Senate Republican is pressing housing regulators to avoid developing rules that could constrain private sector lending, stalling the housing market's recovery. 

Sen. Bob Corker (R-Tenn.), a member of the Senate Banking, Housing and Urban Affairs Committee, urged federal regulators to "simplify and synchronize" underwriting standards for new mortgage lending rules that could permanently push the private sector out of the housing finance business, he said in a letter sent on Tuesday. 

Specifically, he said that if federal regulators write qualified residential mortgage (QRM) rules that differ from those qualified mortgage (QM) rules recently established by the Consumer Financial Protection Bureau, the government will retain its dominance in the mortgage market.

"Matching CFPB's version of a safe loan for any borrower with your definition of what constitutes a loan that is safe for securitization makes sense for our system, and it would be wholly consistent with the statute," Corker wrote in his letter to six government housing regulators.

"Forcing lenders to comply with two separate sets of rules isn't good policy, and in this case, it would set back the timetable on doing what we absolutely must do, begin to move away from a complete dependence on the government for mortgage credit in our country," Corker said.

"If these standards do not match those defined in the many lenders may only make loans that could be sold to Fannie, Freddie or the FHA, which would effectively regulate private capital out of the system for years to come," he said.

The federal government back about 90 percent of all mortgage loans. federal government now standing behind over 90 percent of home loans originated in the United States, a situation that is simply not sustainable, such an outcome would not at all be healthy for our financial system.