24 Where the loan is sold by the original creditor to a purchaser, the loan may become a mortgage only if it is not securitized by sale, assignment or transfer or at any other time before the end of the seasonal period and is not sold to another purchaser. Credit transfers from the original lender (or original purchaser) required by regulatory action or as a result of a merger or acquisition may also continue to be considered experienced quality managers. Finally, the changes made by the new final rules discussed above are by no means the only changes made to the ATR/QM rule by these final rules. Lenders and investors should therefore carefully consider the new rules in their entirety. The ATR/QM rule generally requires lenders, before granting a residential mortgage to a consumer, to make a reasonable and bona fide determination of the consumer`s ability to repay the loan on its terms. However, assessing consumers` ability to repay is complicated and can result in significant liability for lenders if they make mistakes.3 For this reason, the ATR/QM Rule also provides lenders with some protection against such liability when underwriting one of the many categories of “eligible mortgages” defined in the ATR/QM Rule. including a general quality management category (general quality management)4. the GSE QM category mentioned above and several other categories not affected by the final rules. In addition to the deletion of the ESG quality management category, the amended General Quality Management Rule makes several changes to the provisions of the ATR/Quality Management Rule concerning general quality management measures, the two most important of which concern the ITD restriction and the Annex Q requirement. By far the most important change is that the new rule replaces the DTI limit with a new price-based limit (APR limit).
A loan is considered a GSE-QM if it is not only eligible for purchase or guarantee by a GSE, but also meets the requirements set out above in the first two points of the general definition of quality management.13 In particular, this means that loans do not have to comply with the ITD restriction or Annex Q requirement to be considered ESG QMs.