Patch Expiration Will Hit Low Income and Minority Borrowers and Neighbors


Posted To: MND NewsWire

CoreLogic has been running a series of articles in its Insights blog attempting to quantify the potential impact of the expiration of the so-called GSE Patch. The Patch provides an exception to the 43 percent debt-to-income (DTI) ratio limit of the Qualified Mortgage (QM) rule for loans that are eligible for purchase or guarantee by one of the government sponsored enterprises (GSEs) Fannie Mae or Freddie Mac. The patch is due to expire in January 2021 and the Consumer Financial Protection Bureau has stated its intention to let it expire after a possible transitional extension. In Part 1 CoreLogic’s Pete Carroll estimated about 16 percent or $260 billion of 2018 mortgage loan origination volume was QM-eligible due to the GSE Patch. In the second installment Archana Pradhan reviewed borrowers…(read more)

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