On June 22, the CFPB released two Notices of Proposed Rulemaking (NPRM) to address the January 2021 expiration of the so-called GSE Patch for the Qualified Mortgage (QM) Rule. The GSE Patch provided QM status to mortgage loans eligible for purchase by either of the GSEs even if the loans did not otherwise meet the criteria for a QM under the “General QM” standard provided they comply with the same loan-feature prohibitions and points-and-fees limits as General QM loans. Notably, the GSE Patch allows loans to exceed the 43 percent debt-to-income ratio limit required under the General QM standard and also does not require creditors to use Appendix Q to Regulation Z to calculate the consumer’s income and debt. 

In the first NPRM, the Bureau proposes to remove the General QM loan definition’s 43 percent DTI limit and replace it with a price-based threshold. In the second NPRM, the Bureau proposes to delay the expiration of the GSE Patch until the effective date of final amendments to the General QM definition in order to facilitate a smooth and orderly transition away from the GSE Patch definition of a Qualified Mortgage.