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CFPB Extends the Temporary GSE QM Loan Category

On October 20, 2020, the CFPB issued a final rule extending the Temporary GSE QM Loan category (also known as the GSE Patch), which is the temporary qualified mortgage (QM) status enjoyed by residential mortgage loans that are eligible to be purchased by the GSEs, Fannie Mae and Freddie Mac, under TILA’s ability to repay rule. The Temporary GSE QM Loan category was set to expire on January 10, 2021 (sunset date), and the final rule extends it by removing the sunset date.

Although the final rule removed the sunset date, the CFPB indicated that the Temporary GSE QM Loan category will expire on the earlier of: (1) the mandatory compliance date of the final rule amending the General QM loan definition (which is currently in the works); or (2) the date that the GSEs exit conservatorship.

If you have any questions regarding this extension of the GSE Patch or compliance with ATR/QM requirements¸ please contact Solomon Maman.

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