On July 25, 2019, the CFPB issued an Advance Notice of Proposed
Rulemaking (“ANPR”) on the definition of a
“qualified mortgage” under its
ability-to-repay/qualified mortgage rule (“ATR/QM
rule”).1 The ATR/QM rule requires a
creditor to make a reasonable and good faith assessment of a
borrower’s reasonable ability to repay most residential
mortgage loans before the loan is made.2 A
creditor that makes a QM is either conclusively determined (for
non-higher priced loans) or rebuttably presumed (for higher-priced
loans) to have complied with the ATR/QM/QM rule.3
The ATR/QM rule delineates several types of QMs, most
significantly including a class consisting of loans eligible for
sale to or guarantee by Fannie Mae or Freddie Mac (the temporary
GSE QM classification). The majority of home purchase loans made
today fall into the temporary GSE QM classification.4 The ANPR announces that the
Bureau will let this classification sunset on January 10, 2021 (or
earlier, in the
