CFPB proposes "seasoned" QMs

The Consumer Financial Protection Bureau issued a notice of proposed rulemaking to create a new category of "seasoned" qualified mortgages.

To be considered Seasoned QMs under the proposal, 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 in portfolio during the seasoning period and meet underwriting requirements and other restrictions.

ICBA is reviewing the proposal, which has a 30-day comment period. It follows separate CFPB QM proposals to replace the debt-to-income limit with a price-based approach and to extend the GSE "patch."

ICBA supports extending the GSE patch to facilitate a smooth transition to the final QM rule but opposes a price-based approach, which would favor the largest mortgage lenders and introduce unnecessary risk in the mortgage market.

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