It will not be enough for a credit union to stand up in court and claim a safe harbor if one of their loans is being challenged. They are going to have to be able to show what they have done and why they did it that way.”

Shoring up qualified mortgage safe harbor provisions could require credit unions to double down on their traditional strengths and sharply improve documentation, according to legal experts.

The Consumer Financial Protection Bureau’s mortgage regulations offer a measure of legal protection from consumer lawsuits for lenders that fund qualified mortgage loans. So-called QM loans are underwritten to the regulation’s standards, including a loan-to-value ratio that ensures the borrower’s ability to repay.

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