![]() ![]() The bureau called it “a more holistic and flexible measure of a consumer’s ability to repay than DTI alone.” Additionally, CFPB said, conditioning QM status on a specific DTI limit “could impair access to responsible, affordable credit.” The bureau said it adopted the price-based approach for limiting lending in replacement of the specific 43% DTI limit after determining that a loan’s price is a strong indicator of a consumer’s ability to repay. The second of the rules will establish the “seasoned QM,” which would apply to portfolio loans meeting certain performance requirements over a 36-month seasoning period, including having no more than two delinquencies of 30 or more days and no delinquencies of 60 or more days. In a release, CFPB said the first of the two rules will replace the current requirement for general QM loans that the borrower’s debt-to-income ratio (DTI) not exceed 43% with a new requirement of a limit based on the loan’s pricing. After July 1, those loans will not automatically be given QM status. (Freddie Mac), most of which are now considered QMs. The patch covers loans issued by government-sponsored enterprises (GSEs) Federal National Mortgage Association, (Fannie Mae) and the Federal Home Loan Mortgage Corp. ![]() The final rules, the agency said, will “support a smooth and orderly transition away” from the so-called “QM Patch,” which is slated to expire July 1, 2021. 11, 2020) Two final rules related to “qualified mortgages” (QMs) – one installing a limit on lending based on a loan’s pricing, and the second creating a “seasoned QM” – were released Thursday by the CFPB. ![]()
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