CFPB's New Seasoning Rule is Already Showing Promise
Feb 2 2021, 10:14AM
The Urban
Institute (UI) has looked at a final mortgage rule issued by the Consumer
Financial Protection Bureau (CFPB) in late 2020 which
would provide a 3-year
pathway to safe harbor for loans that are a rebuttable presumption
or
nonqualified mortgage at origination. The study, by UI analysts Karan Kaul,
Laurie Goodman, and Jun Zhu found that loan performance during the first three
years of the mortgage term is a better predictor of subsequent loan performance
than the rate spread.
The rule requires
that both rebuttable presumption and nonqualified conventional first-lien