5/27/2023 0 Comments Qm rule cfpbPublic comments on the CFPB’s proposed Delay Rule are due on or before April 5, 2021. Therefore, under the CFPB’s current proposal, the Temporary GSE QM loan definition would expire upon the earlier of Octo(rather than on the current mandatory compliance date of July 1, 2021) or the date the applicable GSE exits Federal conservatorship. In October 2020, the CFPB issued a final rule (the Patch Extension Rule) to replace the Janusunset date of the Temporary GSE QM loan definition with a provision stating that the Temporary GSE QM loan definition will be available only for covered transactions for which the creditor receives the consumer’s application before the mandatory compliance date of the General QM Final Rule. ![]() Under the original ATR/QM Rule, the Temporary GSE QM loan definition would expire with respect to each GSE when that GSE exits conservatorship or on January 10, 2021, whichever comes first. Thus, a loan can qualify as a Temporary GSE QM loan even if the consumer’s DTI ratio exceeds 43 percent, as long as the loan is eligible to be purchased or guaranteed by either of the GSEs. ![]() Unlike for General QM loans, the ATR/QM rule did not prescribe a DTI limit for Temporary GSE QM loans. These loans are referred to as Temporary GSE QM loans, and the provision that created this loan category is commonly known as the GSE Patch. In 2013, the CFPB created a second, supposedly temporary category of QMs for mortgages that (1) comply with the same loan-feature prohibitions and points-and-fees limits as General QMs and (2) are eligible to be purchased or guaranteed by Fannie Mae or Freddie Mac (collectively, the GSEs) while under the conservatorship of the Federal Housing Finance Agency (FHFA). The General QM Final Rule took effect on March 1, 2021, and it provides a mandatory compliance date of July 1, 2021. In December 2020, the CFPB issued the General QM Final Rule, which among other changes replaced the General QM loan definition’s DTI limit with a limit based on loan pricing. Under the original ATR/QM Rule, the ratio of the consumer’s total monthly debt to total monthly income (DTI ratio) could not exceed 43 percent. General QM loans must comply with the ATR/QM Rule’s prohibitions on certain loan features, its points-and-fees limits, and its underwriting requirements. One QM category defined in the ATR/QM Rule is the General QM category. The ATR/QM Rule defines several categories of QMs. Loans that meet the ATR/QM Rule’s requirements for qualified mortgages (QMs) obtain certain protections from liability. On March 3, 2021, the Bureau of Consumer Financial Protection (CFPB) released a notice of proposed rulemaking (NPRM) to delay the mandatory compliance date of the General Qualified Mortgage (QM) final rule from Jto Octo(the Delay Rule).Īs explained in the CFPB’s proposal, the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule) requires a creditor to make a reasonable, good faith determination of a consumer’s ability to repay a residential mortgage loan according to its terms. ![]() A&B ABstract: The CFPB must finalize its proposed QM delay rule in April, likely leaving no room for delay.
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