[rcooper]

Question from our recent webinar, Pandemic Relief – Managing Compliance Issues:
We operate under the Small Creditor Portfolio QM rule. What can we do on a 5/1 ARM, 30 year loan? I am thinking if we try to defer payments, we would result (possibly) in a balloon payment… which isn’t allowed under the QM rules – unless we extended the maturity date – but then that pushes the amortization out past 30 years, which is also a “no-no” under QM rules, I believe. also, if we deferred any payments, we would have to defer both principal AND interest, since QM rules don’t allow interest-only payments. I may be overthinking this… but would appreciate any help.

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[rcooper]

The issue is how do you plan to accomplish the deferral – by refinance or by modification. A refinance is a new transaction subject to all of the rules and limitations of § 1026.35. A modification is not a new transaction and therefore does not trigger the requirements and limitations.

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