Lenders will have more than an additional year to
comply with the General Qualified Mortgage (QM) Rule
. The Consumer Financial
Protection Bureau (CFPB) says it is formally delaying the mandatory compliance
date for the new rule from July 1, 2021 to October 1, 2022. The Bureau says it
is taking the action “to help ensure access to
responsible, affordable mortgage credit, and preserve flexibility for consumers
affected by the COVID-19 pandemic and its economic effects.”

The delay will also give lenders more
time to use the so-called GSE Patch.
The Patch provides QM status to loans that
are eligible for sale to Fannie Mae or Freddy Mae (the GSEs). Use of the Patch,
however, may be limited by recent revisions to the Preferred Stock Purchase
Agreements between the U.S. Treasury and GSEs’ regulator and conservator the
Federal Housing Finance Agency.

The General QM
final rule is intended to protect homeowners from debt traps and unaffordable,
irresponsible mortgage lending. The rule grants QM status to loans that are
presumed to be made based on the lender’s reasonable determination of the
homeowner’s ability to repay the loan.
Delaying the mandatory compliance date
of the General QM final rule allows lenders more time to offer QM loans based
on the homeowners’ debt-to-income (DTI) ratio, and not solely based on certain
pricing thresholds.

“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.”

By Jann Swanson , dated 2021-04-28 10:57:28

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Courtesy of Mortgage News Daily

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