CFPB delays QM compliance date

The Consumer Financial Protection Bureau wants to push back the mandatory compliance date of the General Qualified Mortgage final rule from July 1, 2021 to October 1, 2022.

The Consumer Financial Protection Bureau wants to push back the mandatory compliance date of the General Qualified Mortgage final rule from July 1, 2021 to October 1, 2022.

The move keeps intact the current 43 percent debt-to-income ratio ceiling as well as Fannie Mae and Freddie Mac’s GSE patch. The new QM rule, finalized under former CFPB director Kathy Kraninger, replaced the DTI ratio requirements with a price-based definition and also introduced a new category of “seasoned” loans.

The GSE patch, which extended QM status to loans sold to Fannie and Freddie, would have expired when the new rule went into effect in July. After expiration of the 2014 exemption, those loans would be subject to the same requirements as other QM loans.

“At a time when so many consumers are struggling and at risk of losing ground, particularly Black and Hispanic consumers, we need to do all we can to help people stay in their homes and to ensure the availability of responsible, affordable mortgages,” said CFPB Acting Director David Uejio. “In proposing to extend the date by which lenders must comply with the CFPB’s new General QM definition, we are working to provide needed options for both homeowners and lenders during a time of uncertainty and hardship.”

The agency issued a notice of proposed rulemaking on the move on March 3; comments on the proposal are due April 5.

If this NPRM is finalized as proposed, the old, DTI-based general QM definition; the new, price-based general QM definition; and the GSE patch (unless the GSEs exit conservatorship prior to October 1, 2022) would all remain available as long as the lender received the consumer’s application prior to October 1, 2022.

Fredrikson & Byron Law