CFPB Extends Comment Period for Proposed Rulemaking on New ‘Seasoned QM’ Category
The Consumer Financial Protection Bureau yesterday said it would extend the comment period on its notice of proposed rulemaking to create a new category of seasoned qualified mortgages by three days, from September 28 to October 1 to accommodate for the Yom Kippur Jewish holiday.
On August 18, the Bureau issued a notice announcing the NPRM to create Seasoned QMs as a way to “encourage innovation and help ensure access to responsible, affordable credit” in the mortgage market.
Under Bureau criteria, to be considered a Seasoned QM, loans would have to be first-lien, fixed-rate covered transactions that have met “certain performance requirements” over a 36-month seasoning period. Covered transactions would also have to be held on the creditor’s portfolio during the seasoning period, comply with general restrictions on product features and points and fees and meet certain underwriting requirements.
For a loan to be eligible to become a Seasoned QM, the proposal would also require that the creditor consider and verify the consumer’s debt-to-income ratio or residual income at origination.
Seasoned QMs would only be available for covered transactions that have no more than two 30-day delinquencies and no delinquencies of 60 or more days at the end of the seasoning period. In the event of a disaster or pandemic-related national emergency, and as long as certain conditions are met, the proposal would not disqualify a loan from becoming a Seasoned QM for the failure to make full contractual payments if the consumer receives a temporary payment accommodation. The comment period extension notice can be found at https://files.consumerfinance.gov/f/documents/cfpb_qm-loan-definition-extension-of-comment-period_2020-09.pdf.