CFPB Proposed Rule to Amend General Qualified Mortgage Loan Definition

In Client and Friends Memos, QM/Ability to Repay by BMG Memorandum

In the July 10, 2020 issue of the Federal Register (85 FR 41716, click here) the Bureau of Consumer Financial Protection (Bureau) published a proposed rule, with a request for public comment, that proposes to amend the General Qualified Mortgage Loan definition in §1026.43(e)(2) of Regulation Z (General QM Loan) by removing the General QM Loan definition’s 43 percent total monthly debt to total monthly income ratio (DTI Limit) in paragraph (e)(2)(vi) and replacing it with a price-based threshold. The proposed rule also proposes to remove from paragraph (e)(2)(v) the requirement to use Appendix Q in verifying the consumer’s current or reasonably expected income or assets (subparagraph (e)(2)(v)(A)) and the consumer’s current debt obligations, alimony, and child support (subparagraph (e)(2)(v)(B)).

Full Memorandum