The Consumer Financial Protection Bureau (CFPB) has postponed the General Qualified Mortgage (QM) final rule officially.
Almost two months after the publication of a notice on the proposed definition of rules on this topic, the CFPB officially postponed the mandatory compliance date of the QM rule from July 1st, 2021 to October 1st, 2022.
“So many consumers have been hard hit by the pandemic and economic downturn, and we want to make sure that responsible, affordable mortgages remain available,” said Dave Uejio, acting director of the CFPB. “With the mortgage market at an uncertain and challenging time, extending the date by which lenders must adhere to the CFPB’s new general definition of QM will help provide options and flexibility for both lenders and borrowers.”
The delay gives lenders more time to take advantage of the GSE patchThis confers QM status on loans that are eligible for sale to Fannie Mae or Freddie Mac. In addition, lenders can offer extended-term QM loans based on the homeowner’s debt-to-income ratio (DTI) rather than just specific price thresholds.
The Bureau said the general rule for general QM “is to protect homeowners from debt traps and unaffordable, irresponsible mortgage loans”. The rule that was completed in December, replaces the GSE patch before its scheduled expiration on January 10, 2020.
However, the availability of the patch after July 1, 2021 may be limited by the recent revisions of the purchase agreements for preferred shares concluded by the Ministry of Finance and the Federal Housing Agency.