On January 10, the Consumer Financial Protection Bureau released outlines of its new ability-to-repay regulations, which contain legal protection for mortgage lenders—and their attorneys are now optimistic that the system will work. The new rule is meant to ensure that lenders only offer mortgages that are affordable to borrowers.

The regulations will create a legal "safe harbor" for lenders issuing qualified mortgages. "The odds of facing any protracted litigation are more limited," said Richard J. Andreano, Jr., Practice Leader of Ballard Spahr's Mortgage Banking Group.

He also stated, "A safe harbor is only good when you know you're in the harbor," as the rule seems clear on which loans will protect lenders—a key point for making lenders more comfortable about lending money.

Related Practice

Mortgage Banking