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 […]
Fannie Mae and Freddie Mac Sunset the QM Patch
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.
CFPB Retires the “QM Patch” and Revises QM Rules
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 […]
CFPB Director Provides Update Relating to QM Patch Expiration
A&B ABstract: A recent letter from Consumer Financial Protection Bureau (“CFPB”) Director Kathleen Kraninger provides clues about the potential future of the so-called “QM Patch.” Discussion: In a December 17, 2020 letter to Senator Mike Rounds (“Letter”), CFPB Director Kathleen Kraninger, revealed a number of interesting insights about the CFPB’s ongoing evaluation of the […]