On October 22nd, 2012, NAR filed individual and joint comments on proposed banking capital standards and risk weighting proposals as part of the Basel III rulemaking by the Federal Reserve, OCC, and FDIC. Basel III refers to an international agreement that updates capital and liquidity requirements for banks. The regulations are being put into place to improve the stability of the global banking system, but will likely have a significant effect on the availability and cost of residential and commercial mortgage capital.
NAR expressed concerns that the Basel III proposal will impose harsh new capital requirements on residential and commercial mortgages, whether held in portfolio or sold into a private label securitization. As a result, the proposal has the potential to harm home purchasers, particularly first-time home buyers, minorities, and other disadvantaged groups. NAR also urged regulators to consider the entire regulatory and market framework affecting the industry (QM, QRM, Gfee increases, etc.) when promulgating regulations.