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The CFPB Tuesday issued a final rule to delay the mandatory compliance date of its general qualified mortgage (QM) rule to Oct. 1, 2022. NAFCU offered its support of the delay as it gives lenders more time to utilize the government-sponsored enterprise (GSE) patch; however, recent amendments to the GSEs' Preferred Stock Purchase Agreements (PSPAs) may limit the utility of the GSE patch extension.

Under the PSPA amendments, GSEs may only acquire GSE patch loans before July 1, 2021. NAFCU has raised concerns to the Federal Housing Finance Agency (FHFA) about this restriction as the CFPB has extended its availability. The bureau also cited this issue in its summary of the rule finalizing the delay.

"NAFCU remains concerned about the adverse impacts of the expiration of the GSE Patch given that many credit unions sell their loans to the GSEs and the number of credit unions that reported the expiration would have a 'material' impact on their institution," wrote NAFCU President and CEO Dan Berger in the letter to FHFA Director Dr. Mark Calabria.

The QM rule replaces the debt-to-income (DTI)-based calculation with one based upon an average prime offer rate (APOR). Under the delay, credit unions can opt to use the new APOR-based QM definition or the previous DTI-based general QM definition and use the GSE patch when qualifying mortgages to be sold to the GSEs, but are limited to the PSPA amendments.

NAFCU has previously expressed opposition to the APOR-based definition and has asked the bureau to instead consider a modified DTI with compensating factors if the rule is reconsidered in the future. The bureau indicated it may reconsider the general QM definition or other aspects of the rule at a future date.

One concern related to the APOR-based calculation is the potential for the mispricing of loans and, given the current market conditions, may create an incentive to increase rate spreads for higher-risk borrowers.

NAFCU will continue to work with the CFPB and FHFA to address these concerns and find a viable alternative to the GSE patch during the extension period.