WASHINGTON—The Consumer Financial Protection Bureau has formally delayed the mandatory compliance date of the General Qualified Mortgage (QM) final rule to Oct. 1, 2022 from July 1, 2021.
The CFPB said it 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.”
Both credit union trade groups had been pushing the CFPB for the delay.
“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.”
The General QM final rule, the CFPB said, is part of its effort 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.
According to the CFPB, 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 Bureau said.
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, the CFPB added.
In response, NAFCU noted it had earlier raised a number of related issues with the CFPB.
"NAFCU remains concerned about the adverse impacts of the expiration of the GSE Patch given that many credit unions sell their loans to the GSEs and the number of credit unions that reported the expiration would have a 'material' impact on their institution," wrote NAFCU President and CEO Dan Berger in the letter to FHFA Director Dr. Mark Calabria.