CFPB Issues Final Rule Extending the GSE Patch

The Consumer Financial Protection Bureau (Bureau) has issued a final rule to extend the Government-Sponsored Enterprise (GSE) Patch until the mandatory compliance date of a final rule amending the General Qualified Mortgage (QM) loan definition in Regulation Z.  The GSE Patch was scheduled to expire on January 10, 2021.  The Bureau is not amending the provision in Regulation Z stating that the GSE Patch will expire if the GSEs (Fannie Mae and Freddie Mac) exit conservatorship.

In releasing the final rule, the Bureau is taking steps to ensure a smooth and orderly transition away from the GSE Patch and to maintain access to responsible, affordable mortgage credit upon its expiration.  Further, the Bureau is taking this action to ensure that responsible, affordable credit remains available to consumers who may be affected if the GSE Patch expires before the mandatory compliance date of a final rule amending the General QM loan definition.  The Bureau issued a proposal to amend the General QM loan definition on June 22, 2020, the same day it issued a proposal to extend the GSE Patch.  The Bureau is currently developing a final rule amending the General QM loan definition and is planning to issue it at a later date.

On August 18, 2020, the Bureau also issued a proposed rule related to the ATR/QM Rule to create a new category of QMs (Seasoned QMs). The Bureau is planning to issue a final rule in connection with this proposal at a later date.

READ THE FINAL RULE

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