United States: CFPB proposes a delay in the compliance date for the general modification of qualifying mortgages

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CFPB offers a deadline (from July 1, 2021 to October 1, 2022) for compliance with a December 2020 regulation amendment the definition of the category of qualified general mortgages (“QM”) under Regulation Z (“Loan Truth Act”).

As described in previous cover, The CFPB passed amendments in December 2020 that replaced the 43% limit on a consumer’s debt-to-income ratio (“DTI”) with a limit based on loan pricing, providing for higher thresholds for (i ) smaller loan amounts, (ii) some manufactured home loans, and (iii) subordinate lien transactions. The CFPB explained that for claims received between March 1, 2021 and October 1, 2022, creditors would have the option of complying with the revised definition of price-based general quality management or the general definition of price-based quality management. quality management based on DTI.

Comments on the proposal must be received no later than April 5, 2021.

Primary sources

  1. CFPB Press Release: CFPB Proposes Extension of Mandatory Compliance Date for General Final Rule on Qualified Mortgages
  2. Federal registry: definition of mortgage loans qualified under the Loan Truth Act (Rule Z): general definition of QM loans; Delay of the mandatory compliance date

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