Blog: CFPB delays mortgage rule compliance date – Financial Regulation News – Financial Regulation News

The Consumer Financial Protection Bureau (CFPB) is delaying the General Qualified Mortgage (QM) final rule mandatory compliance date, citing preservation of consumer access and flexibility amid the COVID-19 pandemic.

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The compliance date has shifted from July 1, 2021, to Oct. 1, 2022. The General QM final rule is in accordance with the agency’s work to protect homeowners from debt traps and unaffordable, irresponsible mortgage lending.

“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,” CFPB Acting Director Dave Uejio said. “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.”

According to the CFPB, QM loans are to be made based on the lender’s reasonable determination of the homeowner’s ability to repay the loan and delaying the mandatory compliance date of the General QM final rule provides lenders with more time to offer the loans based on the homeowners’ debt-to-income (DTI) ratio and not singularly basing determinations on pricing thresholds.

Authorities indicated the CFPB’s delayed action would also enable lenders access to more time to use the Government-Sponsored Enterprise (GSE) Patch – a tool providing QM status to loans eligible for sale to Fannie Mae or Freddie Mac.

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