Shoring up qualified mortgage safe harbor provisions could require credit unions to double down on their traditional strengths and sharply improve documentation, according to legal experts.
The Consumer Financial Protection Bureau's mortgage regulations offer a measure of legal protection from consumer lawsuits for lenders that fund qualified mortgage loans. So-called QM loans are underwritten to the regulation's standards, including a loan-to-value ratio that ensures the borrower's ability to repay.
But legal experts said credit unions preparing for the implementation of those rules should also take steps to reinforce the regulation's safe harbor provisions.
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