Lenders that sell loans to Fannie Mae and Freddie Mac will be responsible for determining their compliance with the qualified mortgage rule issued by the Consumer Financial Protection Bureau.
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.”