Compliance Experts See Traps for the Unwary in Proposed Ability-to-Repay, Qualified Mortgage Rules
May 12, 2011
A proposed qualified mortgage standard to determine a borrowers ability to repay a mortgage loan creates many pitfalls for loan originators and subjects them to enormous liability if they fail to comply, warned compliance experts. The risk of making non-qualified mortgages for lenders is the borrowers defense to foreclosure and the higher damages that would be incurred for noncompliance, as well as the impact on the liquidity of those loans if lenders were to sell them down the road, according to panelists on a webinar hosted last week by Inside Mortgage Finance. The proposed ability-to-repay rules and alternative definitions of a qualified mortgage (QM) are out for...