Seasoning

Seasoning describes how long a mortgage loan has been in existence since its origination date. A loan with 24 months of seasoning has been active for two years; one with 120 months has been on the books for a decade. In the secondary note market, seasoning matters because it provides a track record — a longer payment history gives buyers more data to evaluate borrower behavior, while the absence of payments over an extended period raises questions about collectability and statute of limitations exposure.

For re-performing loans, seasoning takes on a specific meaning: buyers want to see how many consecutive payments the borrower has made since the loan was modified or reinstated. A re-performer with 12 months of seasoning — meaning 12 on-time payments since the workout — commands a higher price than one with only 3 months, because the longer track record reduces the risk of re-default. Conversely, non-performing loans that have been delinquent for years require careful analysis of the applicable statute of limitations, since excessive seasoning without any collection activity can render the debt unenforceable in some jurisdictions.