A Reminder of the Risks from Lending Through Third Parties

Last month, BMO Harris Bank changed policies on auto lending to pay a flat percentage of the loan amount to auto dealers making loans (sound familiar?). While the bank was under no obligation to do this and no other auto lenders have followed suit, the bank’s rationale should not escape the attention of lenders having active third-party origination channels. The fact is, lenders with TPO channels have as much if not more legal risk from the actions of TPO partners as they do with their own originators. In other words, if a broker violates fair lending laws, the lender can be held responsible even though it did not originate the loan. Read Full Article on National Mortgage News

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