“Expiration of the Patch without a defined plan to continue to serve these borrowers will have dramatic negative consequences for the housing market, resulting in more expensive or unavailable credit," the MBA explained in a letter to the CFPB. The rule also includes a stipulation that a borrower’s monthly debt-to-income ratio cannot exceed 43%, but that condition does not apply to loans backed by the government ( Federal Housing Administration, Department of Veterans Affairs, or Department of Agriculture).īut the Mortgage Bankers Association believes the CFPB should not let the QM Patch expire without a defined plan to continue to serve creditworthy borrowers who don’t reach the 43% debt-to-income ratio. Recognizing that the rule has shifted an increasing market share toward the GSEs, the Consumer Financial Protection Bureau has expressed its intent to allow the rule to expire as planned. Known as the QM patch, the rule exempts GSE-backed loans from abiding by the full scope of the Ability to Repay/Qualified Mortgage rule, which requires lenders to adequately verify a borrower’s ability to repay their mortgage in the underwriting process. Prominent members of the housing industry are calling for an end to the QM Patch, and reform for Qualified Mortgages.Ī rule that allows government-sponsored enterprises Fannie Mae and Freddie Mac to sidestep stricter mortgage underwriting requirements is set to expire in 2021, and while that may seem like a ways away, its pending removal has sparked widespread debate throughout the industry.
0 kommentar(er)
