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Qualified Residential Mortgage

Qualified Residential Mortgage — Some of you may have heard this phrase being thrown around on the news lately. This summary at the Wall St. Journal does a good job of explaining what it is.

The "fear factor" (what else is there in the news?!) has reached a fever pitch because everyone thinks that you will need 20% down to buy a home, which very few people can do. The truth is that more than 90% of loans are backed by Fannie Mae and Freddie Mac and they are already considered QRM loans. So the actual number of loans that would be affected by this is less than 10%. Still, it does put into place clear standards for the private mortgage security market.