In a comment letter to the CFPB today, the American Bankers Association supported a recent proposal to create a new category of “seasoned” qualified mortgages. This designation would apply to portfolio loans that have met certain performance requirements over a 36-month seasoning period.
ABA noted that the new QM designation would increase access to credit across all communities, expand investor confidence and enhance capital liquidity and availability. The association offered several recommendations to improve the proposed rule’s applicability to loans affected by disasters and pandemics.
ABA also urged the CFPB to consider allowing the seasoning rule to apply to existing transactions, even if originated before the final rule’s effective date, and that the rule be expanded to permit subordinate lien loans to qualify for the new Seasoned QM category of loans.