The Consumer Financial Protection Bureau (CFPB) has officially delayed the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021 to October 1, 2022.
According to a statement from the bureau, the mandatory compliance date is being pushed back to “help ensure access to responsible, affordable mortgage credit, and preserve flexibility for consumers affected by the COVID-19 pandemic and its economic effects.”
“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 Dave Uejio, acting director for the CFPB. “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 new rule would cast aside the previous 43% debt-to-income (DTI) ratio threshold to determine QM eligibility and replace it with a new approach based on the average prime offer rate (APOR) of comparable transactions. With the mandatory compliance date now delayed, both the old, DTI-based QM definition and the new, APOR-based definition would be available for use, as long as the lender receives the borrower’s application prior to the Oct. 1 deadline.
Delaying the final rule’s compliance date also gives 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 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.