UI Says GSE “Patch” has Race, Income Implications

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Posted To: MND NewsWire

Last fall the Urban Institute (UI) published a paper asking, “What, if anything, should replace the QM Patch?” Now Linda Goodman, UI’s Vice President, Housing Finance Policy, is writing that, as the patch’s expiration nearing, new evidence shows an answer to that question is becoming crucial. The “patch” is part of the qualified mortgage (QM) rule developed by the Consumer Financial Protection Bureau (CFPB) to implement the Ability to Repay (ATR) portion of The Dodd-Frank Wall Street Reform and Consumer Protection Act. The ATR rule requires that lenders make a reasonable and good faith determination of a borrower’s ability to repay a loan taking into consideration income, assets, debt, and employment. One way in which a lender can comply with the ATR rule is through originating a QM. A general…(read more)

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