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CFPB RIN: 3170-AA98 Publication ID: Spring 2020 
Title: Qualified Mortgage Definition Under the Truth in Lending Act (Regulation Z) 

In July 2019, the Bureau of Consumer Financial Protection (Bureau) issued an Advance Notice of Proposed Rulemaking (ANPR) to solicit information about possible amendments to the qualified mortgage provisions of Regulation Z.  With certain exceptions, Regulation Z requires creditors to make a reasonable, good faith determination of a consumer’s ability to repay any residential mortgage loan, and loans that meet Regulation Z’s requirements for "qualified mortgages” obtain certain protections from liability.  One category of qualified mortgages (QMs) covers certain loans that are eligible for purchase or guarantee by either the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac).  Under Regulation Z, this category of QMs (Temporary GSE QM loans or GSE Patch) is scheduled to expire no later than January 10, 2021.  The Bureau is planning to release an NPRM in May 2020 to propose amendments to the definition of General QM that would move away from the 43 percent Debt-to-Income requirement and would instead establish an alternative, such as a pricing threshold (i.e., the difference between the loan’s annual percentage rate (APR) and the average prime offer rate (APOR) for a comparable transaction) for loans to qualify as QMs.  General QM loans would still have to meet the statutory criteria for QM status, including restrictions related to loan features, up-front costs, and underwriting.  The Bureau also expects to propose in May 2020 to extend the Patch for a short period until the effective date of the proposed alternative or until one or more GSEs exits conservatorship, whichever comes first.  This would help ensure a smooth and orderly transition away from the Patch by (among other things) allowing the Bureau to complete this rulemaking and to avoid any gap between the expiration of the Patch and the effective date of the proposed alternative.  Finally, the Bureau is considering adding a new "seasoning” definition of QM which would be issued through a separate NPRM.  This definition would create an alternative pathway to QM safe-harbor status for certain mortgages when the borrower has consistently made timely payments for a period.

Agency: Consumer Financial Protection Bureau(CFPB)  Priority: Other Significant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Proposed Rule Stage 
Major: Undetermined  Unfunded Mandates: No 
EO 13771 Designation: Independent agency 
CFR Citation: Not Yet Determined     (To search for a specific CFR, visit the Code of Federal Regulations.)
Legal Authority: 12 U.S.C. 1639c(b)(3)(A),(B)   
Legal Deadline:  None
Action Date FR Cite
ANPRM  07/31/2019  84 FR 37155   
ANPRM Comment Period End  09/16/2019 
NPRM  06/00/2020 
Regulatory Flexibility Analysis Required: Undetermined  Government Levels Affected: Undetermined 
Small Entities Affected: Businesses  Federalism: Undetermined 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Mark Morelli
Office of Regulations
Consumer Financial Protection Bureau
Washington, DC 20552
Phone:202 435-7700