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11. How does the Dodd-Frank incentivize banks to only offer mortgages which they believe will not default?

 

  • Of the mortgages that a bank initiates, at least 5% must be Qualifying Residential Mortgages (QRMs).
  • A bank must sell at least 5% of the Qualifying Residential Mortgages (QRMs) that it initiates.
  • A bank must hold at least 5% of the Qualifying Residential Mortgages (QRMs) that it initiates.
  • With the exception of Qualifying Residential Mortgages (QRMs), a bank must hold 5% of the mortgages that it initiates.

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