In a letter to Congress, the Consumer Financial Protection Bureau (CFPB) announced a proposed change to the Qualified Mortgage (QM) Rule. Under the change, debt-to-income (DTI) ratios will no longer be used to distinguish QM loans from non-QM loans. Instead, the distinction will be based on an “alternative, such as a pricing threshold,” according to CFPB Director Kathy Kraninger. This proposed change follows an Advanced Notice of Proposed Rulemaking issued by the CFPB, to which the QM Task Force of the Structured Finance Association previously submitted comments. As this shift is underway, Director Kraninger mentioned that the GSE Patch will be extended, “until the effective date of the proposed alternative or until one or more of the GSEs exit conservatorship, whichever comes first.”

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