Whether they realize it or not, absent a last-minute intervention from the Federal Housing Finance Agency (FHFA), effective July 1, 2021, creditors will no longer be able to originate qualified mortgage loans using the “QM Patch.” The reason for this dramatic event is that on April 8, 2021, Fannie Mae and Freddie Mac announced in separate […]
Ability to Repay/Qualified Mortgage
The qualified mortgage (QM) rules have become a world of contradictions. In a client advisory, our Financial Services & Products Group investigates how the residential mortgage markets can thread the needle between new rulings from Fannie Mae and Freddie Mac and recent rulings from the Consumer Financial Protection Bureau.
A&B ABstract In a statement issued on February 23, 2021, the Consumer Financial Protection Bureau (“CFPB”) indicated that it intends to delay the General Qualified Mortgage (“QM”) rule’s mandatory July 1 2021 compliance date, and may amend or revoke the “Seasoned QM Rule” that was supposed to become effective on March 1, 2021. Background As […]
A&B ABstract: On December 10, 2020, the Consumer Financial Protection Bureau (CFPB) issued an innovative final rulemaking that creates a pathway to “safe harbor” Qualified Mortgage (QM) status for performing non-QM and “rebuttable presumption” QM loans that meet certain performance criteria portfolio requirements over a seasoning period of at least 36 months and that […]
A&B ABstract: In a significant final rulemaking with potentially far-reaching consequences for the residential mortgage markets, the Consumer Financial Protection Bureau (“CFPB”) is terminating the “QM Patch” and significantly revising the criteria for what constitutes a qualified mortgage (“QM”) loan. Notably, in this rule, issued on December 10, 2020, the CFPB replaces the dreaded Appendix […]