Legal Blog

Compensation and Compliance Matters – December 6, 2013

QM Lacks Conflict with Fair Lending, Memo Promises An interagency memo has advised lenders that offering only qualified mortgages will not create fair lending concerns. According to the memorandum — jointly issued by multiple agencies including the FDIC and CFPB — confirms that lenders who choose to offer only qualified mortgages due to an inability to sell Non-QM loans on the secondary market and an unwillingness to hold such loans, will not be considered a violation of fair lending laws. The memorandum states “[t]he decisions creditors will make about their product offerings in response to the Ability-to-Repay Rule are similar to the decisions that creditors have made in the past with regard to other significant regulatory changes affecting particular types of loans. Some creditors, for example, decided not to offer “higher-priced mortgage loans” after July 2008, following the adoption of various rules regulating these loans or previously decided not to offer loans subject to the Home Ownership and Equity Protection Act after regulations to implement that statute were first adopted in 1995. We are unaware of any ECOA or Regulation B challenges to those decisions.” Read more on National Mortgage News.