If you are unsure of what the QRM is or what it would do, check out an article I wrote for policymic.com that discusses the issue. I want to talk about another side of the debate that isn’t often discussed.
This debate has been solely focused on the restrictions is places on first time home buyers, and rightfully so. Redefining the face of home ownership isn’t a good thing and hurts the economy. Let’s think for a second though about the families that already own a home. Often times, when they are ready to move, they depend on first time home buyers to purchase their homes. What happens to this segment of people when there are no buyers for their homes. With the possible new rules that could change the down payment requirements, even current home owners will have difficulty with a down payment for their next purchase. That is until they can sell their first home. When they can’t sell their first home, it prevents them from moving on. It is a rare instance, in the large scheme of things where a homeowner can afford a second mortgage, and have the large sum for an initial down payment on their next home.
My fear is that not only first time home buyers will be impacted by these changes. Current homeowners will also face difficulty, and our current housing crisis isn’t solved. What it would do is further slow down our market, which is already overburdened with housing stock. Financial reform shouldn’t create more problems for the crisis it is trying to fix.
Just my thoughts.