Action buys consumers more time to access affordable mortgage credit
The Consumer Financial Protection Bureau (CFPB) has made the postponement of the General Qualified Mortgage (QM) final rule official.
Almost two months after releasing a notice of proposed rulemaking on the issue, the CFPB officially delayed the mandatory compliance date of the QM rule from July 01, 2021 to October 01, 2022.
“So many consumers have been hit hard by the pandemic and the economic downturn, and we want to ensure that responsible, affordable mortgages remain available,” said CFPB acting director Dave Uejio. “As the mortgage market navigates an uncertain and challenging time, extending the date by which lenders must comply with the CFPB’s new General QM definition will help provide options and flexibility for both lenders and borrowers.”
The delay gives lenders more time to use the GSE Patch, which provides QM status to loans eligible for sale to Fannie Mae or Freddie Mac. It also allows lenders to offer QM loans based on the homeowners’ debt-to-income (DTI) ratio, and not solely based on certain pricing thresholds, for an extended period of time.
The Bureau said that the General QM final rule is intended to “protect homeowners from debt traps and unaffordable, irresponsible mortgage lending.” The rule, which was finalized in December, replaces the GSE Patch before its scheduled expiration on Jan. 10, 2020.
However, the availability of the Patch after July 01, 2021 may be limited by recent revisions to the Preferred Stock Purchase Agreements entered into by the Department of the Treasury and the Federal Housing Finance Agency.