Despite credit unions' best efforts to comply with the Consumer Financial Protection Bureau's new mortgage rules, the ride has not been smooth. Based on credit union feedback, I recommend credit unions focus on the following in the days ahead.
Qualified mortgages & ability to repay
While most of the buzz was around originating QMs and the risk of not doing so, most credit unions have struck an appropriate balance with these business decisions. Going forward, focus attention on documentation. Confirm policies and procedures reflect whether you're originating QMs, a mix of QMs and non-QMs, or just following the ATR underwriting criteria, which should be spelled out, too. Be sure to also document third-party records used to verify debt and income, and document loan file decision-making, which shows the ability to repay or the loan has met QM status.
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