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Fannie Mae and Freddie Mac have now become the gatekeepers for underwriting qualified mortgages. This guidance might be a safe harbor from litigation, but history indicates it may fail as a safe harbor from risky lending.
February 26 -
The Consumer Financial Protection Bureau is expected to be inundated with comments on how to rework the proposed 3% cap on loan origination points and fees.
February 4
WASHINGTON — The Federal Housing Finance Agency announced Monday that Fannie Mae and Freddie Mac must restrict future mortgage purchases to "qualified mortgage" loans.
The Consumer Financial Protection Bureau outlined the criteria for such loans in a rule issued in January, which included limitations on fees and points charged and verification of a borrower's income.
When the rule goes into effect on Jan. 10 of next year, the FHFA said Fannie and Freddie will only purchase QM loans, effectively barring them from buying interest-only loans or those beyond a 30-year maturity.
The agency did provide flexibility for loans where the borrower had a debt-to-income ratio greater than 43% — another key component of the qualified mortgage rule. Fannie and Freddie may still buy loans with a higher DTI provided it meets underwriting and other eligibility requirements in the GSEs' selling guidelines.
