Mortgage lenders cringe at substantial litigation costs under QM
Mortgage bankers cringed at the latest litigation cost estimates they could face should the Consumer Financial Protection Bureau craft the Qualified Mortgage rule without a safe harbor.
According to a memo from financial law firm Ballard Spahr to the Mortgage Bankers Association, more challenges would make it to trial under the alternative rebuttal presumption clause.
Based on 76 cases in which the firm represented lenders in similar situations, the average attorney fee for when a case is dismissed totaled $26,000. This goes up to $84,000 under a summary judgment. If it goes to a trial, fees can climb as high as $155,000, Ballard Spahr said.
Copy of the letter to the MBA below…
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