Compliance attorneys and mortgage industry lobbyists aren’t the only ones wishing the Consumer Financial Protection Bureau (CFPB) would proceed with the General Qualified Mortgage Final Rule as it had initially planned.
The same day the CFPB announced plans to delay the compliance date, Sens. Mark Warner (D-VA) and Tim Scott (R-SC) fired off a letter to CFPB Acting Director Dave Uejio, urging the agency to “reconsider” the move.
“We urge the Bureau to allow the General QM Final Rule to proceed as intended and commit to a longer-term approach to monitoring the broader housing market implications of mortgage lending under the rule,” the pair wrote.
The lawmakers said the General QM Final Rule was an “appropriate balance” between consumer protection and promoting the availability of mortgage credit. They also voiced their support for the planned expiration of the GSE Patch. The option, which gives lenders flexibility for QM underwriting, expires July 1.
A CFPB spokesperson said the Bureau received the letter and will remain in dialogue with Congress regarding the mortgage market as the recovery continues.
New GSE guideline updates to Fannie and Freddie forces them to cap the amount of second home and investor properties delivered at 7%. This means a meaningful amount of supply will have to come to the non-QM Sector.
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Scott and Warner also pointed out, as many have, that the General QM Final Rule was a long time in the making. Financial institutions, consumer advocate groups and civil rights organizations all weighed in during the public comment period.
Recent changes at the agency, however, suggest that there will indeed be tweaks to the General QM rule.
Last year, a senior CFPB official made public statements criticizing the General QM Final Rule. The Biden administration appointed that official, Diane Thompson, as senior advisor for markets and regulations, where she oversees the rule-making process.
In interviews with HousingWire, multiple compliance attorneys said that Thompson’s strong feelings about the general QM rule represent a risk for the agency, which is tasked with crafting regulations after considering industry input. An official having a closed mind before the rule-making comment period could call a proposed rule into question, several of the attorneys said.
“It’s fine to articulate strong views,” said Brian Johnson, a partner at Alston and Bird and former deputy director of the CFPB. “But if the person who is developing rules and directing the team has already articulated them publicly, and the final rule closely tracks with those views notwithstanding the evidence, it could potentially create complications for the agency.”