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CFPB Looks at Changing Qualified Mortgage Rule, Lifting DTI Limits
Tuesday, June 23, 2020
With its so-called GSE Patch set to expire on January 10, 2021
(unless by some miracle the conservatorship of Fannie Mae and Freddie Mac (the
GSEs) ends earlier), the Consumer Financial Protection Agency (CFPB) has issued
two proposed amendments to the Ability to Repay/Qualified Mortgage Rule (ATR-QM
Rule). The ATR-QM Rule provides a safe harbor that protects lenders
from lawsuits charging lenders for failing to appropriately quality a borrower's
repayment ability. In general, the QM rule requires that a loan comply with
prohibitions on certain loan features, points and fee limitations. It also requires
that a borrower's a debt-to-income (DTI) ratio does not exceed 43 percent and that
creditors "calculate, consider, and verify debt and income for purposes of
determining the consumer's DTI ratio using the standards contained in Appendix
Q of Regulation Z."
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