ABA to CFPB: Extend ‘GSE Patch’ Six Months Past QM Final Rule

The American Bankers Association yesterday welcomed the Consumer Financial Protection Bureau’s proposal to extend the temporary “GSE patch”—which grants Qualified Mortgage status to loans eligible to be purchased or guaranteed by Fannie Me or Freddie Mac—until the bureau’s proposed QM rule changes are finalized and take effect.

ABA also urged the bureau to extend the GSE patch not just until the QM rule takes effect but six months beyond that date “to allow creditors adequate time for implementation and systems changes.” The association recommended that the bureau permit use of either the GSE patch or the new QM definition during that period to “limit the risk of market disruption and ensure that consumers have access to fair and affordable mortgage credit.”

The bureau is still accepting comments on its broader proposal to revise the QM rule that would replace the use of the 43% debt-to-income ratio as a QM qualification standard with a price-based approach.