Local lenders say U.S. ‘qualified mortgage’ rules go too far

The Consumer Financial Protection Bureau rules, which aim to eliminate lending abuses that caused the financial crisis, will hurt borrowers, lenders say.

By E. Scott Reckard, Los Angeles TimesMay 27, 2013, 6:13 p.m.

Even as federal regulators recently cracked down on loose mortgage lending, they hoped that credit unions and community banks would serve as a haven for marginal borrowers.

Such neighborhood institutions know their customers, the theory goes, so they could better judge the risk in lending outside new rules for a so-called qualified mortgage.

But smaller lenders are pushing back, saying they’ll just scale back their mortgage business instead. They fear that lending at the margins will make them targets for bank regulators and plaintiffs’ attorneys in cases of default.


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