The Seattle Times: Fed offers two options for protecting lenders
A sweeping financial measure enacted last year bars lenders from approving a mortgage without verifying if the borrower has a reasonable ability to repay it.
Lenders that violate that rule leave themselves vulnerable to lawsuits and enforcement actions. Struggling homeowners could even use violations of this rule to fight foreclosure.
But lawmakers left it up to regulators to decide how this measure should be applied in the real world, and under which conditions lenders would be free from liability.