With the removal of Appendix Q and the 43% debt-to-income ratio limit, however, the CFPB has added substantial official commentary describing how lenders can consider and verify this information. Additionally, lenders are still required to “consider and verify” a borrower’s income, assets, debts, and liabilities when originating a general QM. General QMs still must meet the current restrictions against certain loan features common to most other QM types (such as no negative amortization and or no loan terms exceeding 30 years) and have points and fees no greater than the 3% cap (with higher caps for certain smaller loans). A loan with an APR exceeding the APOR by 2.25 percentage points or more cannot meet the definition of a general QM, unless it has a smaller loan amount subject to higher caps. A loan may qualify as a “Rebuttable Presumption QM” if (among other things) its APR is at 1.5 percentage points but less than 2.25 percentage points above the APOR at the time the interest rate is set.
Under these requirements, a loan may qualify as a “Safe Harbor QM” if (among other things) its APR is less than 1.5 percentage points above the APOR at the time the interest rate for the loan is set (3.5 percentage points or more for second-lien loans). The General QM Rule replaces the DTI and Appendix Q requirements with requirements based on the pricing of the loan. The major features of the General QM Rule are the elimination and replacement of the requirement that for a General QM, the borrower’s debt-to-income ratio must not exceed 43% based on Appendix Q.
#Qm points and fees limits 2020 Patch#
Another recent final rule provides that the so-called “Temporary GSE Patch QM” will expire on the mandatory effective date of the General QM Rule which is July 1, 2021, or the date the GSEs exit conservatorship, if earlier than July 1.
Both rules will become effective 60 days after they are published in the Federal Register, expected shortly. On December 10, 2020, the CFPB released two separate final rules: the first, redefining the General Qualified Mortgage requirements (General QM Rule) and the second, establishing requirements for a new Seasoned QM loan (Seasoned QM Rule).