The Ability to Repay/Qualified Mortgage rules have always provided several options for compliance. Now one option is expiring, another option is undergoing major revisions, and a new option is being created. All financial institutions must make decisions on which options to adopt and how to implement the option(s) chosen.
In a final rule released on October 20, 2020 (the Extension Final Rule), the Consumer Financial Protection Bureau (CFPB) amended Regulation Z to replace the January 10, 2021 sunset date of the Temporary GSE QM loan definition with a provision stating that the Temporary GSE QM loan definition will be available only for covered transactions for which the creditor receives the consumer’s application before the mandatory compliance date of final amendments to the General QM loan definition in Regulation Z.
On December 10, 2020, the CFPB issued two final rules related to qualified mortgage (QM) loans. The first final rule, the General QM Rule, replaces the current requirement for General QM loans that the consumer’s debt-to-income ratio (DTI) not exceed 43 percent with a limit based on the loan’s pricing. The second final rule, reveals a new Seasoned QM.
The new and revised rules were effective on March 1, 2021.
- Compliance with the revised General QM rule is mandatory on July 1, 2021 with optional compliance between the effective date and July 1, 2021 mandatory date. The CFPB has proposed to extend the mandatory use date until October 1, 2022.
- The existing Temporary GSE QM option expires on the mandatory date, and creditors using that option must select an alternative option by that date.
- The seasoned QM rule will apply to covered transactions for which creditors receive an application on or after March 1, 2021. The CFPB has decided not to apply the final rule to loans in existence prior to the effective date.
The Ability to Repay/Qualified Mortgages Review and Update webinar has been approved for 2.5 CRCM credits. This statement is not an endorsement of this program or its sponsor. Credits are redeemable for Live attendance only. Certification holders must report these credits at https://aba.csod.com.
Who should attend
The program is designed for Compliance Officers, Loan Officers, Loan Processors, Auditors, and others with responsibilities related to the origination and servicing of mortgage loans.
Ability to Repay/Qualified Mortgages Review and Update has been approved for 2.5 CRCM credits. This statement is not an endorsement of this program or its sponsor. Credits are redeemable for Live attendance only. For questions on certificates, please email email@example.com. Certification holders must report these credits at https://aba.csod.com.