The combination of weak legal protection, a narrow definition of “qualified mortgages” and growing use of the disparate impact theory of lending discrimination is creating rifts in the mortgage banking industry and leading some companies to pull back or abandon the market altogether. The ability-to-repay rule being developed by the Consumer Financial Protection Bureau was arguably the most talked-about issue at this week’s secondary market conference held by the Mortgage Bankers Association. Its two major ingredients are a definition of qualified mortgages – loans that are underwritten to certain...