A Qualified Mortgage (QM) Curveball

On February 23rd, the CFPB issued a statement on the planned changes to the General Qualified Mortgage (QM) definition and the new Seasoned QM definition.  Both are set to go into effect on March 1st

According to the statement, both the revised General QM and Seasoned QM rules will still go into effect on March 1st.  However, it appears the CFPB plans to delay the July 1st mandatory compliance date for the General QM, as well as, the Temporary QM expiration date.

If this happens, there will be two versions of the General QM (current and revised), a Temporary QM and the new Seasoned QM.  The other QMs will remain unchanged (small creditor, FHA, VA, etc.).  The rules, as originally written, were going to have the biggest impact on secondary market lending.  With yesterday’s curveball; however, our best guess is that secondary market loan underwriting will remain unchanged until the CFPB decides what to do next.

The CFPB plans to revisit parts of the revised General QM definition and seemingly the Seasoned QM option as a whole.  If the CFPB does decide to change or revoke the Seasoned QM, it will also address what happens with applications received on or after March 1st, while the rule was in effect.

Join us on March 9th as we bring you the ins and outs and where we’re at with all these QM changes in plain English!


Share This