News Releases

Thursday, February 17, 2011

Isakson to Regulators: Don't Shut Out Qualified, Responsible
Homebuyers With Large Down-Payment Requirement

WASHINGTON - U.S. Senator Johnny Isakson, R-Ga., who spent more than three decades in the real estate industry, today cautioned federal regulators who are drafting eligibility rules for the newly enacted Qualified Residential Mortgage against requiring a large down-payment that will shut out too many potential homebuyers and prolong the recovery for the nation's housing market.

During a Senate Banking Committee hearing, Isakson specifically told Sheila Bair, chairman of the Federal Deposit Insurance Corporation (FDIC) that he is very concerned over suggestions that federal regulators might consider requiring a down-payment as large as 30 percent for a homebuyer to be eligible for the Qualified Residential Mortgage. Isakson, along with Senators Mary Landrieu, D-La., and Kay Hagan, D-N.C., authored the Qualified Residential Mortgage provision of the Wall Street Reform and Consumer Protection Act, also known as the "Dodd-Frank financial reform bill," that was signed into law on July 21, 2010.

Their mortgage provision requires lenders to fully document a borrower's income and assets, verify that they have acceptable debt-to-income ratios and are capable of repaying their loans. Mortgages that meet the Qualified Residential Mortgage definition will be exempt from the risk-retention requirements of the Dodd-Frank law, thereby providing an incentive for lenders. In turn, borrowers with these mortgages could avoid the added costs that would trickle down to them from their lender, thereby benefiting all parties involved.

"I request that you proceed with caution when writing the rules necessary to carry out the Qualified Residential Mortgage provision because you could further protract the real estate recession by denying liquidity in the private market to reasonable mortgages that have been underwritten properly," Isakson said to Bair. "I hope you will follow the guidelines and the parameters that Senators Landrieu, Hagan and I issued in the Qualified Residential Mortgage provision to ensure that we do not penalize credit-worthy borrowers seeking homeownership."

On Feb. 16, 2011, Isakson, Landrieu and Hagan sent a letter urging the FDIC, the Secretary of Housing and Urban Development, and the director of the Federal Housing Finance Agency to adhere to the framework designed in the legislation for the Qualified Residential Mortgage.

Isakson also wrote an opinion editorial expressing similar concerns that appeared in The Hill this week. It can be read at

Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County, Ga., office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years, presiding over the company's growth into the largest independent residential real estate brokerage company in the Southeast and one of the largest in America.