QM

CFPB Proposes New Category of Qualified Mortgages

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On August 18, the Consumer Financial Protection Bureau (CFPB) issued a Notice of Proposed Rulemaking (NPRM) to create a new category of qualified mortgage (QM) loans exempt from Regulation Z’s ability-to-repay requirements. The new “Seasoned QM” category would include certain fixed rate, first lien loans that the creditor has held in portfolio for a seasoning period of 36 months and that meet certain performance requirements at the end of such period. The proposal would also permit loans in temporary forbearance as a result of disaster or pandemic-related emergencies to qualify for Seasoned QM status if certain conditions are met. Comments on the proposal will be due 30 days after publication in the Federal Register. Release. NPRM.

CFPB Final Rule Amendments to Ability to Repay and QM Rule

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On May 29, the CFPB issued a final rule amending its ability-to-repay and qualified mortgage (QM) rule.  The amendments, effective in conjunction with the ability-to-repay rule on January 10, 2014, (i) exempt certain nonprofit and community-based lenders from the rule; (ii) facilitate lending by small creditors, including certain community banks and credit unions, by making changes to qualified mortgage status for loans issued by small creditors; and (iii) establish the calculation method for loan origination compensation.  CFPB Release.  CFPB Final Rule Amendments.