The Office of the Comptroller of the Currency issued a bulletin to CEOs of all mortgage lending businesses including national banks, federal savings associations and federal branch agencies.
The topic of the bulletin was the lending standards for assets dissipation underwriting and urged encouraged banks to put the consumers needs first when offering residential mortgage loans.
"The OCC is issuing this bulletin to remind bankers and examiners that real estate and mortgage lending activities are subject to specific regulatory standards and guidelines," according to the bulletin.
"Banks originating mortgage loans using asset dissipation underwriting (ADU) should develop and implement policies, processes, and control systems for ADU in a manner consistent with safe and sound banking practices set forth in existing regulations. ADU activities should align with the banks’ overall business plans and strategies."
The bulletin went as far as to make suggestions on strategies that could aid lending institutions, including "working with consumers who have a capacity to repay a mortgage loan even though they do not meet traditional income-based underwriting repayment standards."
The bulletin features background on ADU, as well as regulatory standards and guidelines. To learn more about the latest bulletin from the OCC, click on the image above.