And the government-sponsored enterprises could hold initial public offerings in 2021 or 2022 to ensure they hold adequate capital, FHFA Director Mark Calabria said.
Fannie Mae and Freddie Mac’s exemption from the Qualified Mortgage rule is on borrowed time, but a House bill would allow lenders to use the mortgage giants’ guidelines for documenting borrower income.
Industry groups are calling on the consumer bureau to eliminate the debt-to-income limit for “qualified mortgages” and provide a short-term extension of special treatment for Fannie- and Freddie-backed loans.
Though advocates and industry are rarely aligned, they are starting to coalesce around a plan that would call for the elimination of the CFPB’s 43% debt-to-income limit as part of its qualified mortgage rule.
With the agency mulling changes to the “Qualified Mortgage” regulation, mortgage lenders say little-known standards for how they document a borrower’s income would be a good place to start.
Many in the industry say releasing GSE-backed loans from stringent underwriting rules has helped the housing market recover, but a new level of regulatory burden could reverse those gains.
The mortgage industry was caught off guard by regulators’ decision to cease special treatment for Fannie Mae and Freddie Mac in complying with underwriting rules. But how big of an impact will the new policy have?
A GSE exemption in the bureau’s “qualified mortgage” rule is set to sunset in 2021, and regulators should not try to extend it as some experts have suggested.
