Following a request for information in 2017, the CFPB has issued an advance notice of proposed rulemaking that would not only end the qualified mortgage (QM) temporary exemption for loans sold to Fannie Mae and Freddie Mac, but also redefine the QM.  The agency’s major goal is to reduce market reliance on GSE securitization and thus the taxpayer risk associated with it.  It thus seems likely that the patch will be pulled as of its current termination date of January 10, 2021 or very shortly thereafter.  However, the QM could also be significantly redefined in ways that not only make it easier for private originators to make higher-risk loans, but also to continue the very significant role of Fannie Mae and Freddie Mac.

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