CFPB Delays Mandatory Compliance Date for General Qualified Mortgage Final Rule

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WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) this week formally delayed the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021, to October 1, 2022. The CFPB is taking this 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.

“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.”

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The General QM final rule is part of the CFPB’s work to protect homeowners from debt traps and unaffordable, irresponsible mortgage lending. Under the statute, QM loans 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.

Delaying the final rule’s compliance date would also give lenders more time to use the Government-Sponsored Enterprise (GSE) Patch, which provides QM status to loans that are eligible for sale to Fannie Mae or Freddie Mac. The availability of the GSE Patch after July 1, 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.

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Read the final rule here.

Read an executive summary of the final rule here.

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