The Bureau’s primary objective with this proposal is to ensure access to responsible, affordable mortgage credit by adding a Seasoned QM definition to the existing QM definitions. The ATR/QM Rule also defines several categories of qualified mortgage loans, which obtain certain protections from liability. The Bureau of Consumer Financial Protection (Bureau) is issuing this proposal to create a new category of QMs (Seasoned QMs) for first-lien, fixed-rate covered transactions that have met certain performance requirements over a 36-month seasoning period, are held in portfolio until the end of the seasoning period, comply with general restrictions on product features and points and fees, and meet certain underwriting requirements. A lender must make a good-faith effort to determine that you have the ability to repay your mortgage before you take it out. The Bureau is not proposing to amend the provision stating that the Temporary GSE QM loan category would expire if the GSEs exit conservatorship. A Qualified Mortgage is a category of loans that have certain, less risky features that help make it more likely that you’ll be able to afford your loan. QM, or the qualified mortgage rule, kicks in Jan. Regulation Z contains several categories of QMs, including the General QM category and a temporary category (Temporary GSE QM loans) of loans that are eligible for purchase or guarantee by government-sponsored enterprises (GSEs) while they are operating under the conservatorship or receivership of the Federal Housing Finance Agency (FHFA). QM loan definition with a provision that extends the Temporary GSE QM loan definition to expire upon the effective date of final amendments to the General QM loan definition. Many mortgage lenders may elect not to offer non-QM loans, or may price them considerably higher than QM loans. With certain exceptions, Regulation Z requires creditors to make a reasonable, good faith determination of a consumer’s ability to repay any residential mortgage loan, and loans that meet Regulation Z’s requirements for “qualified mortgages” (QMs) obtain certain protections from liability. Non-QM loans are expected to be higher priced loans that may have features historically associated with subprime loan products, and are likely to be made to consumers with the lowest acceptable credit scores (high credit risk).
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