Summary outlines compliance date for QM rule

(May 21, 2021) The CFPB’s final rule to delay the compliance date for its new “qualified mortgage” (QM) rule to Oct. 1, 2022 has been summarized by NASCUS and posted to the website.

The summary is available to members only.

In April, the bureau announced that compliance with its QM rule would be delayed to next year, asserting that the pause would allow lenders more time to offer the loans based on homeowners’ debt-to-income (DTI) ratios, and not only on certain pricing thresholds. The delay, which changes the mandatory compliance date from July 1 of this year to the Oct. 1 date of next year, is part of a final rule the CFPB is calling the “April 2021 Amendments to the ATR/QM Rule.” ATR stands for “ability to repay.”

Even though last month’s rule extends the compliance date to next year, the effective date of the QM rule remains March 1, 2021. However, the rule extending the compliance date becomes effective June 30.

According to an executive summary of the final rule published last month, for mortgage applications on the effective date (or after) – but before the new mandatory compliance date of Oct. 1, 2022 – lenders have the option of complying with either the revised, price-based general QM loan definition or the original, total monthly DTI-based general QM loan definition.

Only the revised, price-based general QM loan definition is available for applications received on or after the Oct. 1, 2022 mandatory compliance date, the summary states.

Summary: Final Rule re: Delayed Mandatory Compliance Date for the Qualified Mortgage Definition Under TILA (members only)