QM LOANS DEFINITION PATCH
Rulemaking: Last year on July 25, 2019, through an Advance Notice of Proposed Rulemaking (ANPR), the CFPB announced, to the surprise of many, that it planned to allow the GSE Patch to expire at the beginning of 2021. We would welcome the opportunity to assist in your efforts to write and provide comments on any of these issues of interest to you and your company. It is, then, particularly important whenever possible to ensure that comments submitted are likewise supported by as much data as may be available or at least supportive of the data the CFPB provides. Accordingly, throughout these NPRMs, the CFPB provides extensive and detailed data in support of the positions it takes and the decisions it has made so far. The CFPB has consistently maintained throughout its existence that it is and will always be a data-driven regulator. In fact, if you agree with the proposed changes, it is particularly critical that you submit comments in support of them, in order to avoid having adverse commenters appear to be in the majority and compel the CFPB to revise its views. For this reason, it is imperative that all interested parties take the opportunity to submit comments during the comment period individually, through their counsel, and/or through their associations.
It is clear that while the CFPB has issued the NPRMs with specific proposed courses of action, it has left the door open to changing its views by encouraging commenters to challenge, contest, rebut and offer alternative proposals. Considering how impactful these proposals are, significant commentary on them is assured. When comments on these proposals are considered and a final rule is issued, the new definition of QM is expected to set the criteria to obtain the most affordable and safest credit for years to come. Comments on both proposals are invited for sixty days from the date of their publication in the Federal Register, expected shortly. One of the NPRMs details the proposed changes to the QM definition and the other would extend the GSE Patch, currently set to expire in January, 2021, pending establishment of the changes.
QM LOANS DEFINITION MAC
Both are targeted at replacing the General QM and the soon expiring Temporary GSE QM (commonly referred to as the “GSE Patch”), which confers QM status on loans eligible for purchase or guarantee by Fannie Mae or Freddie Mac (the GSEs), with a revised, more workable, set of General QM requirements. On June 22, 2020, the CFPB issued two Notices of Proposed Rulemaking (NPRMs or Proposals).
This week, the Consumer Financial Protection Bureau (CFPB) took major steps toward revising the requirements for the Qualified Mortgage (QM) under the Ability to Repay/Qualified Mortgage Rule (ATR/QM Rule or Rule).
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