The End of Arbitration Agreements in Lending Docs Is Nigh

May 16, 2013
Housing Wire 
mortgage lending news

Starting on June 1, mandatory arbitration agreements no longer will be allowed within certain mortgage documents. The Truth in Lending Act change "bans terms that require arbitration or any other non-judicial procedure to resolve any controversy or settle any claims arising out of the [lending] transaction," attorneys with Ballard Spahr warned in an industry-wide alert. The prohibition, part of the Consumer Financial Protection Bureau's final rule on loan originator pay, does not apply to loan applications that were received before June 1 but consummated after that date.
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