The Treasury Department this week proposed eliminating the special qualified-mortgage provision that allows Fannie Mae and Freddie Mac to acquire loans with debt-to-income ratios that exceed the normal 43 percent limit for QM loans. The special treatment for the government-sponsored enterprises, known as the GSE patch, “creates an unfair advantage for government-supported mortgages without providing additional consumer protection … and inhibits consumer choices by restricting private sector flexibility and participation,” the agency said in a report on financial service regulatory reform. The report urged...