While lenders who make qualified mortgages that must conform to certain criteria have greater legal protection than those loans that do not, the Consumer Financial Protection Bureau (CFPB) published a factsheet that states, “We will stand with borrowers and homeowners to ensure financial institutions treat them properly. Borrowers who fall behind now have more options to take control.” Some lenders are concerned that borrowers may be encouraged to sue, and may be reluctant to offer loans that do not fall within the guidelines of the qualified mortgage (QM) rule scheduled to take effect next month, despite assurances from CFPB Director Richard Cordray. Says Richard Andreano of Ballard Spahr mortgage banking, “The (legal) cost to prove I did my job correctly is so significant I’ve got to reconsider making a loan in the first place.” In the final analysis, as nationalmortgagenews informs MHProNews, while lenders must make a good faith effort to determine if a borrower has the ability to repay a loan, the factsheet reminds consumers it is ultimately up to them to decide if they are comfortable with the terms of the loan.
