We are a little over a third of the way through 2021 and massive shifts within the mortgage industry have occurred, whether due to the unexpected (COVID-19) or to the long-anticipated (URLA). While First American Docutech cannot address the unexpected for the remainder of this year (as much as we wish), we are keeping a watchful eye on changes expected to occur within the near future. The top three that we have identified are:

1. New restrictions on Federal National Mortgage Association’s (“FNMA”) and Federal Home Loan Mortgage Corporation’s (“FHLMC”), requiring them to only purchase Qualified Mortgages (“QM”);
2. FNMA’s and FHLMC’s discontinuance of Constant Maturity Treasury (“CMT”)-index adjustable-rate mortgages (“ARM”);
3. New State laws requiring the safeguarding of private personal information of consumers.

The following is a “high-level” overview of these changes, with more details to come over the next few months.

QMs Only
Three major parts of the QM requirements promulgated under 12 C.F.R. § 1026.43 were recently amended, one of which is in regards to the expiration of the so-called “GSE QM Patch” under Ibid. § 1026.43(e)(4)(ii)(A)(1). Under this Patch, a loan purchased or guaranteed by either FNMA or FHLMC, while operating under the conservatorship or receivership of the Federal Housing Finance Agency (“FHFA”), along with meeting a couple of conditions, would be considered a QM.