The CFPB extended its comment deadline for proposed amendments to Regulation Z ("Truth in Lending Act") that would establish a new category of "qualified mortgages" ("QMs"), i.e., mortgages as to which a creditor may receive liability protection. The comment deadline was extended from September 28, 2020 to October 1, 2020.
As previously covered, the proposed QM category, "Seasoned QMs," would be defined as transactions in which the loan (i) is secured by a first lien, (ii) has a fixed rate with payments that are fully amortizing and non-balloon, and (iii) has a term that does not exceed 30 years. Under the proposal, the transactions must satisfy points-and-fees limits and underwriting requirements over a "36-month seasoning period." Seasoned QMs would be limited to covered transactions that have no more than two 30-day delinquencies and no 60-day delinquencies, not including nonpayments resulting from a temporary payment accommodation.
Primary Sources
- CFPB Press Release: CFPB to Extend Comment Period for Notice of Proposed Rulemaking on New Category of Qualified Mortgages
- CFPB Rule Proposal: Qualified Mortgage Definition under the Truth in Lending Act (Regulation Z) - Seasoned QM Loan Definition
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