The Consumer Financial Protection Bureau (CFPB) recently issued a final rule to extend the Government-Sponsored Enterprise (GSE) Patch, which was scheduled to expire on Jan. 10, 2021. The CFPB is not amending the provision in Regulation Z, which states that the GSE Patch will expire if the GSEs (Fannie Mae and Freddie Mac) exit conservatorship.
In releasing the final rule, the CFPB is taking steps to ensure a smooth and orderly transition away from the GSE Patch and to maintain access to responsible, affordable mortgage credit upon its expiration. Further, the CFPB is taking this action to ensure that responsible, affordable credit remains available to consumers who may be affected if the GSE Patch expires before the mandatory compliance date of a final rule amending the General QM loan definition. The CFPB issued a proposal to amend the General QM loan definition on June 22, 2020, the same day it issued a proposal to extend the GSE Patch. The CFPB is currently developing a final rule amending the General QM loan definition and is planning to issue it at a later date.
To read the final rule, click here.