The home loan industry now has to adapt to new mortgage rules that offer borrowers much needed protection against lender abuses and reckless lending standards. But the changes may not please all borrowers.
Some of the new mortgage rules will influence qualification requirements and the types of mortgages that borrowers get. The regulations, drawn up in 2013 by the Consumer Financial Protection Bureau, are now in effect.
The gist of one of the main rules is simple: Lenders will be required to ensure that borrowers have the ability to repay their mortgages. In return, lenders will be protected from borrower lawsuits so long as they issue “safe” mortgages that follow guidelines.
These safe mortgages are what the CFPB calls “qualified mortgages.” As defined by the CFPB, only 12.8% of new mortgages in 2012 didn’t meet the “qualified mortgage” standard, according to real estate data provider CoreLogic.
The new […]