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Industry Announcement

Aug 5
1:08
PM
Category | Mortgage Speak

Recently, the Consumer Financial Protection Bureau issued an “Advance Notice of Proposed Rulemaking (ANPR) seeking information relating to the expiration of the temporary qualified mortgage provision applicable to certain mortgage loans eligible for purchase or guarantee by the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac...” The ANPR notes that the CFPB is planning to allow the temporary qualified mortgage provision, known as the GSE Patch, to expire in January 2021.  

So, what does this mean? CFPB Director Kathleen L. Kraninger explains, “The national mortgage market readjusting away from the Patch can facilitate a more transparent, level playing field that ultimately benefits consumers through stronger consumer protection.” Furthermore, “With the large percentage of loans being sold presently to Fannie and Freddie in excess of 43% debt-to-income ratio [the threshold typically required for loans to obtain qualified mortgage status], the outcome of what will happen to the GSE Patch is very important to our industry” says Norcom Mortgage President, Phil DeFronzo.  

To read more about this, please visit the CFPB’s press release here:  

https://www.consumerfinance.gov/about-us/newsroom/bureau-releases-qualified-mortgage-anpr/