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Qualified Mortgage Definition under the Truth in Lending Act (Regulation Z): General QM Loan Definition

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Mortgage Bankers Association filed 1 comment on this docket between Sep 9, 2020 and Sep 9, 2020. 20 other organizations filed here. The comment window closed 2149d ago.

What Mortgage Bankers Association filed (1)

Sep 9, 2020· Comment Submitted by Bob Broeksmit, Mortgage Bankers Association· CFPB-2020-0020-0073

Please see the attached comments from the Mortgage Bankers Association.

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Abstract

(Update on 8/19/2020: The Bureau has released a separate proposal for a Seasoned QM Loan Definition and will request comment on that proposal in a separate docket. In addition, a copy of that separate proposal has been added as related material in this docket. The separate proposal explains that comments on the General QM Proposal should be filed on this docket, CFPB-2020-0020, which closes on September 8, 2020, including comments on the specific subject of whether anything in the Seasoned QM Loan Definition proposal affects how the Bureau should finalize the General QM Proposal. Comments on that specific subject may also be submitted to the docket for the Seasoned QM Loan Definition proposal, but any other comments concerning the General QM proposal will be considered outside of the scope of and will not be considered in the Seasoned QM Loan Definition rulemaking.) With certain exceptions, Regulation Z requires creditors to make a reasonable, good faith determination of a consumer's ability to repay any residential mortgage loan, and loans that meet Regulation Z's requirements for “qualified mortgages” (QMs) obtain certain protections from liability. One category of QMs is the General QM loan category. For General QM loans, the ratio of the consumer's total monthly debt to total monthly income (DTI ratio) must not exceed 43 percent. In this notice of proposed rulemaking, the Bureau proposes certain amendments to the General QM loan definition in Regulation Z. Among other things, the Bureau proposes to remove the General QM loan definition's 43 percent DTI limit and replace it with a price-based threshold. Another category of QMs is loans that are eligible for purchase or guarantee by either the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) (government-sponsored enterprises, or GSEs), while operating under the conservatorship or receivership of the Federal Housing Finance Agency (FHFA). The GSEs are currently under Federal conservatorship. The Bureau established this category of QMs (Temporary GSE QM loans) as a temporary measure that is set to expire no later than January 10, 2021 or when the GSEs exit conservatorship. In a separate proposal released simultaneously with this proposal, the Bureau proposes to extend the Temporary GSE QM loan definition to expire upon the effective date of final amendments to the General QM loan definition in Regulation Z (or when the GSEs cease to operate under the conservatorship of the FHFA, if that happens earlier). In this present proposed rule, the Bureau proposes the amendments to the General QM loan definition that are referenced in that separate proposal. The Bureau's objective with these proposals is to facilitate a smooth and orderly transition away from the Temporary GSE QM loan definition and to ensure access to responsible, affordable mortgage credit upon its expiration.

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Co-filers (20)

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Qualified Mortgage Definition under the Truth in Lending Act (Regulation Z): General QM Loan Definition (CFPB) — Mortgage Bankers Association | OpenPolis