CFPB WAFFLING ON QUALIFIED MORTGAGE RULES

On February 23, 2021, Dave Uejio, acting director of the Consumer Financial Protection Bureau (CFPB), issued a statement that announced, “We expect to propose a rule to delay the General QM Final Rule’s July 1, 2021 mandatory compliance date. An extension of the compliance deadline would allow lenders more time in which they could make QM loans based on a debt-to-income ratio or whether the loans are eligible for sale to Fannie Mae or Freddie Mac, and not just a pricing cut off.”

If such a proposed rule were finalized, creditors would be able to use either the current General QM loan definition or the revised General QM loan definition for applications received during the period from March 1, 2021, until the delayed mandatory compliance date. Furthermore, the CFPB anticipates that the Temporary GSE QM loan definition will remain in effect until the new mandatory compliance date, in accordance with the October 20, 2020 final rule, except that the Temporary GSE QM loan definition would expire with respect to a GSE if that GSE ceases to operate under conservatorship prior to the new mandatory compliance date.

Uejio also indicated, “We are also considering whether to revisit the Seasoned QM Final Rule through rulemaking. If we do so, we would consider whether any potential final rule amending or revoking the Seasoned QM Final Rule should apply to transactions where an application was received during the period from March 1, 2021 until the effective date of that final rule.”

Editor’s comment: With a March 1, 2021 effective date, most financial institutions have already completed revisions to policies and procedures, system updates and training to implement the QM revisions. Now the CFPB decides to make further changes. This will result in a major duplication of efforts. The CFPB better do something really amazing with the additional planned revisions to justify the mess they are creating.

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