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News Archive

Compliance Compass: confused about "ability-to-repay"?

 

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Paul Guttormsson

Confused about ability-to-repay and qualified mortgages?

 

Under one of the many new mortgage lending rules taking effect in January 2014, credit unions will have to calculate a borrower’s ability to repay before making any closed-end loan secured by a dwelling.

 

The credit union will be presumed to comply with the complicated requirements if the loan meets the standards to be considered a "qualified mortgage." Staff can be understandably confused by what this all means. Here are some resources that can help:

 

  • The League recently updated its ii Release No. B074 to explain the regulation. The release now includes charts and a section that lays out the "pros and cons" credit unions face in deciding whether to make qualified mortgages or to rely only on their ability-to-repay analyses.

 

 

 

Our Compliance Officer School in Wisconsin Dells November 20-21 will, among many other hot topics, address these mortgage-related compliance issues. Mark your calendar!

 

Questions? Contact me at (262) 408-6009.


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