One in five mortgages fail QM litmus test

Julie C. Nichols General

HousingWire – Kerri Ann Pancuk

One in five mortgages originated today would fail the litmus test for obtaining heightened legal protections under the qualified mortgage rule’s safe harbor provision, according to a test trial conducted by ComplianceEase. Come January, the safe-harbor provision offered as part of Dodd-Frank’s QM standard will be the only thing that gives lenders absolute legal protection if an originated loan fails later on. But to get this important stamp of approval, lenders first have to show the loan meets certain underwriting provisions and new standards for points and fees.

This may sound easy, but a recent test performed by ComplianceEase suggests it’s not so cut and dry — and many loans could be left out, making it essential for lenders to get their arms around the best QM compliance tools.

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