Well, this bit of news should come as no surprise: In anticipation of the January, 2014 implementation of the CFPB’s Qualified Mortgage (“QM”) Rules, Fannie and Freddie’s overseer, the FHFA, has already signaled its intent to purchase only QM loans in the future. Earlier this year, the CFPB, the mega-agency spawned by the unholy alliance of Chris Dodd and Barney Frank issued its QM guidelines, which if not followed, could summon a host of horribles the likes of which Pandora never imagined. For a discussion of these rules, go to my post here.
In a recent article titled “Enterprises Directed to Limit Purchases to QM Loans” the informative online site The M. Report, carried the following story:
“… beginning January 10, 2014, the GSEs [i.e., Fannie and Freddie] will no longer purchase loans subject to CFPB’s “ability to repay” rule if those loans are not fully amortizing, have terms of longer than 30 years, or include points and fees in excess of 3 percent. Effectively, this excludes interest-only loans, loans with 40-year terms, and those with points and fees exceeding the thresholds established by regulations.”
The Take-Away. So for the balance of 2013, the GSEs will continue to follow their current purchasing guidelines. What does this mean for potential borrowers who won’t be able to make the QM grade next year? If I were an enterprising mortgage broker or Realtor®, I’d be beating the drum to my clients and customers that 2013 may be a pretty good year to get a home purchase loan.
And being the unrepentant critic I am about the unintended consequence of Dodd-Frank, the CFPB, under the guise of “protecting consumers”, is gradually pulling up the ladder to home ownership for many deserving folks who still want their slice of the American Dream. ~PCQ
