Place 728 x 90 Ad Here

The Real Estate Bloggers

The Real Estate Bloggers

Your Home Is Just Minutes Away From the Airport

Posted: 13 Jan 2014 12:04 PM PST


New Mortgage Rules Make Buying Harder For Riskier Buyers

Posted: 13 Jan 2014 11:57 AM PST

The new mortgage rules that went into effect on January 10th could hurt lower income buyers going forward.

Under the Dodd-Frank Act that was passed in 2010, lenders are now going to have to have to make a "reasonable, good faith determination" that a borrower can repay the loan before the loan is written. This sounds like common sense, but it does place a new responsibility on lenders, and that will always make it harder for those on the lower income end of the earning curve to borrow.

The real hassle will be the new levels of documentation that will be requested by the banks and mortgage companies. The risk of potential penalties from the Consumer Financial Protection Bureau, a new bureaucracy that will monitor lending practices, means that lenders will focus only on qualified mortgages going forward.

The Qualified Mortgage must meet these requirements:

  • A Qualified Mortgage is a loan a borrower should be able to repay. Beginning on January 10, 2014, lenders making virtually any residential mortgage loan will have to assess a borrower's ability to repay the loan. A Qualified Mortgage is presumed to meet
    this requirement. A Qualified Mortgage is a loan that avoids risky features and meets other requirements.  In general, the borrower also must have a total monthly debt-to-income ratio including mortgage payments of 43% or less.
  • A Qualified Mortgage is safer and easier to understand. QMs can't have risky features like negative amortization or interest-only payments
  • A Qualified Mortgage should be a fairer deal. The new rules limit the points and fees lenders can charge when they want to make a qualified mortgage. This requirement responds to the the extremely high points and fees some borrowers paid during the
    mortgage crisis. A loan over $100,000 can't be a QM if it has points and fees that are more than 3% of the loan amount.

With the added risk and expense of writing new mortgages, many lenders are going to avoid the riskier new buyer market, something we do not need right now for the resale housing industry.


Post a Comment

Note: Only a member of this blog may post a comment.

Real Estate © 2010 Template design by Vida de bombeiro . Powered by Blogger.
Vida de bombeiro Recipes Informatica Humor Technology Curiosidades Mensagens News Tecnology Curiosity Car News Saude Video Games Mister Colibri Diario das Mensagens Eletronica Rei Jesus News Esportes Noticias Atuais Pets Career Religion Fashion Recreation Business Education Television Programming Motosport Tech Arts Fashion Business Computer Academics Sport Design Photography Travel Ebooks Music Politic Science Education Gadget Games Ecology Fish Flowers Sociology Home Soccer Downs Center Handicraft Education Show Music Show Fashion Health Freak Drag Home Toscas Noticias dos Times Futebol Central do Coração Science Livros Politics Music Business Women Law Downloads Saude Downs Computer Downs World Tele News Wireless Tech Arts Fashion Business Computer Academics Sport Design Photography Travel Ebooks Music Politic Science Education Gadget Games Ecology Fish