The Dodd-Frank Act is intended to reform residential mortgage lending and securitization practices that contributed to the recent financial crisis. The Act provides some liability protection for lenders originating mortgages that meet nine specified criteria associated with a borrower¿s ability to repay (¿qualified mortgages¿). The act also requires securitizers of mortgages not meeting separate criteria associated with lower default risk to retain at least 5% of the credit risk. This report discusses the potential impact of the act¿s: (1) qualified mortgage criteria; (2) credit risk retention requirement; and (3) provisions concerning homeownership counseling and regulation of high-cost loans. Charts and tables. This is a print on demand report.

Mortgage Reform: Potential Impacts of Provisions in the Dodd-Frank Act on Homebuyers and the Mortgage Market

"Dodd-Frank Wall Street Reformand Consumer Protection Act (Dodd-Frank Act) is intended, among otherthings, to reform residential mortgagelending and securitization practicesthat contributed to the recent financialcrisis. The act provides some liabilityprotection for lenders originatingmortgages that meet nine specifiedcriteria, as applicable, associated witha borrower's ability to repay ("qualifiedmortgages"). The act also requiressecuritizers of mortgages not meetingseparate criteria associated with lowerdefault risk to retain at least 5 percentof the credit risk, though federalrulemaking agencies may vary thisamount. The act directed GAO toassess the effect of mortgage-relatedprovisions on the availability andaffordability of mortgage credit and toissue a report by July 2011, but federalagencies are still developingimplementing regulations. This reportdiscusses the potential impact of theact's (1) qualified mortgage criteria,(2) credit risk retention requirement,and (3) provisions concerninghomeownership counseling andregulation of high-cost loans.To do this work, GAO analyzed aproprietary database of residentialmortgages, reviewed relevant housingand mortgage market research, andinterviewed key mortgage industrystakeholders.GAO provided a draft of this report toeight agencies. In a letter, the NationalCredit Union Administration said, asnoted in the report, that the act's..."

Experts debate the possible consequences of the Dodd–Frank Act, discussing such topics as banking regulation, derivatives, the Volcker rule, and mortgage reform. The Dodd–Frank Wall Street Reform and Consumer Protection Act, passed by Congress in 2010 largely in response to the financial crisis, created the Financial Stability Oversight Council and the Consumer Financial Protection Bureau; among other provisions, it limits proprietary trading by banks, changes the way swaps are traded, and curtails the use of credit ratings. The effects of Dodd–Frank remain a matter for speculation; more than half of the regulatory rulemaking called for in the bill has yet to be completed. In this book, experts on Dodd–Frank and financial regulation—academics, regulators, and practitioners—discuss the ways that the law is likely to succeed and the ways it is likely to come up short. Placing their discussion in the broader context of regulatory issues, the contributors consider banking reform; the regulation of derivatives; the Volcker Rule, and whether or not banks should be forced to stop proprietary trading; the establishment of the Consumer Financial Protection Bureau, and possible flaws in its conception; the law and “too-big-to-fail” institutions; mortgage reform, including qualification requirements and securitization; and new disclosure requirements regarding CEO compensation and conflict minerals. Contributors James R. Barth, Jeff Bloch, Mark A. Calabria, Charles W. Calomiris, Shane Corwin, Cem Demiroglu, John Dearie, Amy K. Edwards, Raymond P. H. Fishe, Priyank Gandhi, Thomas M. Hoenig, Christopher M. James, Anil K Kashyap, Robert McDonald, James Overdahl, Craig Pirrong, Matthew Richardson, Paul H. Schultz, David Skeel, Chester Spatt, Anjan Thakor, John Walsh, Lawrence J. White, Arthur Wilmarth, Todd J. Zywicki

This innovative book analyses the role played by real estate markets in global financial stability and examines the fragile link between the two. Through what transmission channels do housing market cycles influence broader economic systems? How