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NAR: Tight credit could limit boost from QE3

Trade group questions proposed mortgage regulations

The Federal Reserve's latest stimulus plan will have a limited impact on housing if impending rules governing mortgage credit availability result in even tighter lending standards, the National Association of Realtors said in a letter to Federal Reserve Chairman Ben Bernanke today. On Thursday, the Fed announced a third round of "quantitative easing," or QE3, in which it will buy $40 billion a month in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac, and also continue to reinvest principal payments from its holdings of Fannie and Freddie debt and MBS. The move is intended to keep downward pressure on interest rates, including mortgage rates. NAR 2012 President Moe Veissi, writing on behalf of NAR members, expressed support for QE3 and Bernanke's previous "ongoing admonitions that credit standards have become unreasonably tight." He highlighted three controversial regulations -- the qualified mortgage (QM), the qualified residential mortgage (QR...