Trump Administration targets the “QM Patch”; I’ll be in NJ this week
I read this article earlier today and it really got me thinking.
Technically, for a loan to be categorized as a “Qualified Mortgage” the DTI ratio must be 43%... or (and that’s a big OR) the loan fits into the GSE’s eligibility requirements, which for FNMA & FHLMC could mean a DTI of 50% (this is the QM Patch). This is a curious topic and it sparks debate, so much so that the Trump Administration has gone as far as saying it gives the GSE’s an unfair advantage in the market.
An infusion of private capital into the mortgage lending space could potentially provide consumers more flexible lending options, but we’ll never see it with the current ATR/QM rules in place. The more I think about… since the inception of the CFPB’s rule we have not seen a true Non-QM lender emerge. Why is that? Was this “rule” established by the CFPB to ensure we were lending to qualified borrowers or was it established to generate revenue for Uncle Sam while taking the legs out of the private sector? It’s just a thought… I’d love to know what you think.
I’ll be in the Garden State until Wednesday this week. It’s funny… I’ve been here a handful of times, but for whatever reason I’ve never seen a garden. Why’s that?