![]() Fannie and Freddie were granted an exemption (the “QM patch”) that allowed them to exceed that limit. One way the original rule accomplished that was to limit each borrower’s debt-to-income ratio to 43 percent. The original qualified mortgage rule was adopted in 2014 in the aftermath of the 2007-08 mortgage meltdown to discourage lenders from providing risky loans. Lenders who meet the general QM rule are granted a legal “safe harbor” from lawsuits by borrowers, which makes it easier to bundle qualified mortgages into mortgage backed securities that are sold to investors. The update “further highlights our commitment to leveraging our technology, data and industry expertise to help our clients and partners navigate the ever changing lending landscape,” said Joe Tyrrell, president of ICE Mortgage Technology, in a statement. Luckily the latest update to ICE Mortgage Technology’s Encompass loan origination system, release 21.2, gives lenders the flexibility to use either the old role or the new one, depending on who they’re originating the loan for. ![]() ![]() ![]() A phase-in of new rules for underwriting standards for so-called “qualified mortgages” means lenders can keep using the old rules until next year when they’re originating loans they don’t intend to sell to Fannie Mae or Freddie Mac.īut if they want to originate mortgages that qualify for purchase or guarantee by Fannie and Freddie, lenders will need to follow the new “general QM” rule. ![]()
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