This memorandum notifies those clients who make or will make qualified mortgages (QM) subject to the price-based General QM definition in §1026.43(e)(2) where the QM interest rate may or will change within the first five years after the date on which the first regular periodic payment will be due (i.e., adjustable-rate mortgages (ARMs) and step-rate loans), that on February 23, 2022, the CFPB issued a Factsheet (click here) addressing how prepaid interest (a/k/a per diem interest) factors into the calculation of the APR for a QM under the price-based General QM definition in §1026.43(e)(2) of Regulation Z.
Full Memorandum
