If you sell loans on the secondary market, there was a development last week you will want to be aware of. On April 8, 2021, Fannie Mae and Freddie Mac announced that they will only purchase loans that comply with the New General QM requirements. This applies to applications received on or after July 1, 2021.
You may recall that in December 2020, the CFPB finalized the New General QM and the Seasoned QM requirements. Both were set to take effect on March 1st with a mandatory compliance date of July 1, 2021. However, in February 2021, it announced plans to make changes to these QMs. On March 3rd, they issued a proposal to delay the mandatory compliance date for the New General QM to October 1, 2022.
So, while the CFPB planned to kick the can down the road regarding the New General QM, Fannie and Freddie have other plans. You will need to get up to speed on the requirements for the New General QM before July 1st.
Do you need more on the Seasoned and General QM changes that were finalized in December 2020? Be sure to check out our webinar, “The New QM Rules”, which is available now OnDemand. The “Repayment Ability and Risk Requirements Matrix 5.0” in the Free Lending Tools of our website is a good outline of the requirements as well.
Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!