CFPB finalizes general, seasoned QM definitions

by NAFCU Newsroom

As indicated by its fall rulemaking agenda that final rules would be released in December, the CFPB Thursday issued final rules to amend the general definition of a qualified mortgage (QM) and create a new category of seasoned QMs.

The final general QM definition replaces the debt-to-income (DTI) method with a limit on the loan’s pricing. The final rule:

  • defines a general QM as a loan with an annual percentage rate (APR) that is no more than 2.25 percent (or 225 basis points) above the average prime offer rate (APOR);
  • maintains the distinction between a safe harbor – now set at 1.5 percent, as was originally proposed – and rebuttable presumption QM – set at 2.25 percent, an increase from the proposal;

 

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