General Qualified Mortgage Final Rule Compliance Date Delayed by CFPB
April 27, 2021 – The CFPB formally delayed the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021 to October 1, 2022.
QM loans are presumed to be made based on the lender’s reasonable determination of the homeowner’s ability to repay the loan. The CFPB press release said that delaying the mandatory compliance date of the General QM final rule allows lenders more time to offer QM loans based on the homeowners’ debt-to-income (DTI) ratio, and not solely based on certain pricing thresholds.
The CFPB’s press release additionally stated that delaying the final rule’s compliance date would also give lenders more time to use the Government-Sponsored Enterprise (GSE) Patch, which provides QM status to loans that are eligible for sale to Fannie Mae or Freddie Mac. The availability of the GSE Patch after July 1, 2021 may be limited by recent revisions to the Preferred Stock Purchase Agreements entered into by the Department of the Treasury and the Federal Housing Finance Agency.
Note: Correspondent lenders should check with their investors as some investors will follow the original mandatory compliance date of July 1, 2021.
CFPB Adds Housing Assistance Loan Questions to TRID FAQs
May 17, 2021 – The CFPB added five housing assistance loan questions to its TRID FAQs related to the Building Up Independent Lives and Dreams Act (BUILD Act). The FAQs confirm that housing assistance loans are covered by TRID and are subject to a partial exemption from LE and CD requirements if they meet certain criteria. An FAQ also clarifies that a creditor may provide an LE and CD for a loan that qualifies for the BUILD Act partial exemption. See the FAQs for details.
CFPB Report on Mortgage Borrowers’ COVID-19 Challenges
May 4, 2021 – The CFPB released two reports regarding mortgage borrowers coping with the COVID-19 pandemic and economic downturn. The first report finds that Black and Hispanic mortgage borrowers are much more likely to be delinquent or in a forbearance program than white borrowers. In a second report, the CFPB reports that overall mortgage complaints to the CFPB have risen to their highest level in three years.
On April 5, 2021, the CFPB sought comments on a proposal intended to help prevent avoidable foreclosures for borrowers affected by the COVID-19 emergency. That proposal, if finalized, would temporarily require servicers to enhance communications with borrowers who are delinquent or in forbearance, allow servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships, and require servicers to afford all borrowers a special pre-foreclosure review period. The comment period closed May 10th.
Permitless (Constitutional) Handgun Carry Bill on Governor’s Desk
Governor Abbott has promised to sign House Bill 1927, which would allow Texas residents, who are not otherwise prohibited from possessing a gun by state or federal law, to carry handguns without a license. When the governor signs the bill—which is on his desk awaiting his signature—Texas will join at least 20 other states allowing permitless carry of handguns. Currently, under Texas law, a person must possess a license to legally carry a handgun either openly or concealed.
The bill contains a section addressing the ramifications of entry onto property, land or building with a firearm where entry with a firearm is forbidden.
Note: Please consult with your institution’s counsel or trade association representative to determine the impact of this legislation on your Texas locations.
May Frequently Asked Question
Question: If we deliver the Risk Based Pricing Exception Notice (Model H-3) to a customer, must we also send the Notice to Home Loan Applicant as well? Additionally, is the Notice to Home Loan Applicant required for a land only purchase?
Answer: If a bank is using risk-based pricing and delivering the Risk-Based Pricing Exception Notice (Model H-3), then because the Notice to Loan Applicant is incorporated into the Model H-3 notice, a an additional Notice to Home Loan Applicant disclosure is not required. When a financial institution uses a consumer credit score, but does not use risk-based pricing, then it must provide the Notice to Home Loan Applicant.
PPDocs, Inc. does not filter the Notice to Home Loan Applicant for Lot Loans. The disclosure requirement applies to both closed-end and open-end loans that are for consumer purposes and are secured by one-to four-family residential real properties, including purchase and refinance transactions. This requirement will not apply in circumstances that do not involve a consumer purpose, such as when a borrower obtains a loan secured by his or her residence to finance his or her small business. See 15 U.S.C. 1681g(g).