The new rule revises the QM definition and proposes an extension to the QM patch.

The Mortgage Bankers Association commented on the Consumer Financial Protection Bureau’s proposed rule to amend its General Qualified Mortgage (QM) loan definition in Regulation Z. The letter to Consumer Financial Protection Bureau Director Kathleen Kraninger explained MBA’s support for the price-based QM construct proposed by the CFPB and offered several recommendations to help ensure the rule meets its stated goals of robust consumer protections and broad access to sustainable credit. “MBA commends the Bureau for this proposal and its commitment to ensure the continued availability of sustainable, affordable mortgage credit, while maintaining robust standards for high-quality QMs,” said Mortgage Bankers Association President and Chief Executive Officer Robert Broeksmit, CMB. “The proposed revisions to the General QM definition, as well as the proposed short-term extension of the government-sponsored enterprise (GSE) Patch, reflect an appropriate careful consideration of the Bureau’s statutory duties and the goals of the ATR/QM Rule,” the letter said. “In the comments that follow, MBA explains its support for the price-based QM construct proposed by the Bureau and offers several recommendations to help ensure the rule meets its stated goals of robust consumer protections and broad access to sustainable credit.” Specifically, MBA said it: supports the Bureau’s proposal for a QM construct based on a spread of loan price against the average prime offer rate (APOR) benchmark; supports the Bureau’s proposal to eliminate debt-to-income (DTI) ratio as a standalone factor for eligibility under the General QM definition; and offered recommendations to clarify the eligibility criteria for the proposed General QM definition.

Source: MBA