Legal Blog

Compensation and Compliance Matters – January 16, 2014

Non-Qualified Mortgage Loans Interest Ramping Up If you tell the average person that a new law requires lenders to have a good faith belief that a borrower can repay a loan they make, the reaction is quite predictable: “Wouldn’t a lender only make a loan they thought could be repaid?”

 Loan Officer Referral PolicyThat response, which I have heard many times from people outside the industry, provides an important reality: while the risks of substantial litigation costs are very real, in most cases the ability-to-repay claims should be winnable in front of juries. Lenders can significantly increase their likelihood of success and diminish litigation risks by instituting proper policies and procedures and ensuring that their overall compliance infrastructure is sufficient.

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