The so-called GSE Patch for the Consumer Financial Protection Bureau's (CFPB) 2013 Ability-to-Repay (ATR) and Qualified Mortgage (QM) rule (Rule) is scheduled to expire in January 2021 (earlier if the government sponsored enterprises (GSEs) are released from conservatorship.) The Patch created a temporary category under the ATR and QM rule under which loans eligible for purchase or guarantee by the GSEs can qualify as QM loans. The ATR and QM rules require lenders to make a reasonable, good-faith determination of a consumer's ability to repay a mortgage loan based on verified borrower financial information. These include consumer protection features generally associated with responsible mortgage lending practices.
Time to Dust Off Your ARMs?
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The residential construction numbers in June were expected to come in largely in the same neighborhood as in May. Analysts however got it only half right. While starts fell fractionally, permits took a dive, falling by 6.1 percent compared to the previous month. The U.S. Census Bureau and Department of Housing and Urban Development said permits for residential construction were at a seasonally adjusted annual rate of 1,220,000 compared to a revised 1,299,000 in May. May permits were originally reported at an annual rate of 1,295,000. The June number put the year-over-year results down by 6.6 percent. Analysts polled by Econoday had expected an annual pace of 1,300,000 for permits. Their forecasts ranged from 1,252,000 to 1,300,000, missing the actual results completely.