And violations of the ability to repay standards in the final QM rule could trigger repurchase requests.
The “ability to repay requirement is a statutory obligation under the Truth in Lending Act—any breach of which would violate a lender’s representation and warranties regarding compliance with laws,” according to Fannie’s Selling Guide 2013-06.
The new guidance applies to new loans with application dates after Jan. 9, 2014.
Starting in January, the GSEs will stop purchasing loans with prepayment penalties, interest-only features and terms that exceed 30 years.
Fannie also said it would stop purchasing VA-guaranteed graduated payment mortgages.
Loans covered by the QM rule cannot have total points and fees the exceed 3% of the loan amount. And other loans that are exempt from the QM rule cannot have points and fees that exceed 5% of the loan amount, according to the guidance issue by the two GSEs on Aug. 20.
“Freddie Mac will not make a determination of whether a mortgage is exempt from, or complies with, the CFPB final rule or whether a seller’s designation of the status of a mortgage under the CFPB final rule is correct,” Freddie says in Seller Bulletin 2013-16. “These determinations of compliance with the CFPB rule and other applicable laws are the seller’s responsibility.”