Comment on CFPB-2012-0029-0064

Before a definition of qualified balloon mortgage is finalized, please complete a survey or hold an outreach with rural bankers, with bankers in counties adjacent to MSAs, and with small community banks (i.e. less than $250 million) to determine the volume of home loans that are made on a balloon basis. A training session we attended recently indicates that the definition currently being considered is very narrow, and very few banks would actually be able to to meet the conditions. At minimum, please include something that allows banks to do balloon loans without the customer having to be able to afford/pay the balloon amount in 3 or 5 or 7 years, but rather have a reasonable expectation that the balloon will be refinanced. (Refer to the 11-9-09 FRB letter.)