![]() Some features of non-QM loans include: Risky features. Regardless, lenders should continue to monitor both the actions of the GSEs and the CFPB for future developments regarding the General QM Final Rule. A qualified mortgage meets the CFPB’s ability to repay rule, which requires that lenders vet your finances and set terms on the loan that you’re likely to be able to pay back. Furthermore, because loans must conform to the new General QM Final Rule to be eligible for purchase by the GSEs, the GSE patch will effectively cease on July 1 to provide an alternative means for lenders to originate a QM loan.Ĭonsidering the CFPB’s announcement in February that it intended to review the General QM Final Rule, there has been speculation that the CFPB may be buying time to amend or repeal the General QM Final Rule, which was issued under the Trump administration. As explained by Fannie Mae in Lender Letter LL-2021-09 and Freddie Mac in Bulletin 2021-13, the GSEs will generally only purchase loans originated on or after July 1 if they conform to the requirements of the General QM Final Rule. This rule, however, may prove of little effect. As a result, and in accordance with the dates below, we will no longer acquire loans that are GSE Patch loans that do not meet the Revised QM Rule. Additionally, the GSE patch will continue to exist until October 1, 2022. The PSPA requires that we acquire loans that meet the revised General Qualified Mortgage (QM) loan definition in the CFPB’s rule1 that became effective Mar. Details concerning the new General QM Final Rule can be found here.Īs a result of the new rule, lenders can continue to originate QM loans using the old general QM loan definition for loans with an application received date before October 1, 2022. Borrowers must have a reasonable debt-to-income ratio (DTI), and mortgage lenders can’t offer mortgage products with artificially low introductory monthly payments that sharply increase when the teaser period. The General QM Final Rule was created to address the expiration of the GSE patch, which permits certain mortgage loans eligible for purchase or guarantee by Fannie Mae and Freddie Mac (GSEs) to qualify as QM loans despite not meeting all requirements of the general QM loan definition. What Is A Qualified Mortgage A qualified mortgage loan (QM loan) meets all the consumer protection requirements of the Dodd-Frank Act. The CFPB stated that it issued the rule “to help ensure access to responsible, affordable mortgage credit and to preserve flexibility for consumers affected by the COVID-19 pandemic and its economic effects.” The mandatory compliance was originally set for July 1. On April 27, the Bureau of Consumer Financial Protection (CFPB) issued a final rule to delay the mandatory compliance date for the General QM Final Rule until October 1, 2022.
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