CFPB: New Proposed Rule Posted QMD

Friday, a new proposed regulation has been posted by the Consumer Financial Protection Bureau (CFPB) on the Qualified Mortgage Definition. With certain exceptions, Regulation Z requires creditors to make a reasonable, good faith determination of a consumer’s ability to repay any residential mortgage loan, and loans that meet Regulation Z’s requirements for ‘‘qualified mortgages’’ obtain certain protections from liability.

One category of qualified mortgages (QMs) is loans that are eligible for purchase or guarantee by either the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively the GSEs). This category of QMs is referred to as the Temporary GSE QM Loans (or GSE Patch).

The CFPB plans to allow this category of QMs to expire as scheduled by January 10, 2021 or after a short extension, if necessary, to facilitate a smooth and orderly transition away from the Temporary GSE QM Loan category.

The Bureau has issued an Advance Notice of Proposed Rulemaking (ANPR) to seek comments on Regulation Z’s General Qualified Mortgage definition considering the planned expiration of the GSE Patch.

CLICK HERE to log in, review the proposal and voice your concerns by filing a comment letter through PowerComment.

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