CFPB Proposes Extension of Mandatory Compliance Date for General Final Rule on Qualifying Mortgages
WASHINGTON DC – The Consumer Financial Protection Bureau (CFPB) has issued a Notice of Regulatory Proposal (NPRM) to extend the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021 to October 1, 2022. The CFPB proposes extend the compliance date to ensure that owners struggling with the financial impacts of the COVID-19[female[feminine pandemic have the options they need.
“At a time when so many consumers are struggling and at risk of losing ground, especially black and Hispanic consumers, we must do all we can to help people stay in their homes and ensure the availability of responsible and affordable mortgages. Said Acting Office Director David Uejio. “By proposing to extend the date by which lenders must comply with CFPB’s new General QM definition, we are working to provide the necessary options for homeowners and lenders during a time of uncertainty and difficulty.”
The General QG’s final rule is part of the CFPB’s job to protect homeowners from the debt traps and unaffordable and irresponsible mortgages. By law, QM loans are presumed to be made on the basis of the lender’s reasonable determination of the owner’s ability to repay the loan. Extending the mandatory compliance date for QM’s General Final Rule would give lenders more time to offer QM loans based on homeowners’ debt-to-income ratio (DTI), and not just based on a threshold for pricing. Extending the compliance date of the general quality management final rule would also give lenders more time to use the GSE fix, which grants quality management status to loans eligible for sale to Fannie Mae or Freddie Mac.
The COVID-19 pandemic has left nearly 3 million U.S. homeowners on their mortgages. Black and Hispanic communities, in particular, have still not recovered from the impact of the Great Recession and bear the heaviest burden of job losses under COVID-19. Forbearance plans and foreclosure moratoria have helped many homeowners stay in their homes, but these interventions could end before the economy as a whole has recovered from the impact of the pandemic or the market housing has reached a new equilibrium. The CFPB believes that an extension of the mandatory compliance date can help ensure stability and access to affordable and responsible credit in the mortgage market.
If this NPRM is finalized as proposed, the old definition of general quality management based on DTI; the new definition of general QM based on prices; and the GSE patch (unless the GSEs leave the trusteeship by October 1, 2022) would all remain available as long as the lender receives the consumer request by October 1, 2022.
Comments on the NPRM must be received no later than April 5, 2021.
Thank you for your visit! MyChesCo brings reliable information and resources to Chester County, Pennsylvania. Consider supporting us in our efforts. Your generous donation will help us continue this work and keep it free. Show your support today by click here and become a patron.