Expand Your Education with These Courses from
Business Creation - Prospecting: Skills for Sales Success: Part Three.
Customer Relationship Building: Skills for Sales Success: Part Seven.
Expand your education through NAR's REALTOR® University: A Consumer Advocate Approach to Mortgages: Course 2.
At Home with Diversity.
Bundle 1: CIPS Core Course (US Version).

Real Estate Industry Wary ahead of New Mortgage Rules

Have a comment on this article? Share on Facebook!

By Deon Roberts

Lenders can no longer make some types of loans, such as “Alt-A,” in which a borrower is allowed to provide little or no financial information before being given a mortgage. But such risky products are less available since the crisis anyway, brokers and lenders say.

Borrowers and lenders will face even more requirements if a lender chooses to make a qualified mortgage, which requires loans to meet three measurements. In one, points and fees cannot exceed 3 percent of the loan amount, although higher percentages are permitted if the loan is below $100,000. In another requirement, a loan term cannot exceed 30 years.

The general category of qualified mortgages also requires a borrower’s debt-to-income ratio not to exceed 43 percent. If a qualified mortgage is eligible for purchase by Freddie Mac or Fannie Mae or to be insured by government agencies, the debt-to-income requirement does not apply, under a provision set to run until 2021.

Lenders don’t have to make qualified mortgages, but they receive certain legal protections if they do. If a court determines a loan met the qualified-mortgage requirements and also fits within a certain interest-rate threshold, a borrower could not win a lawsuit alleging a lender did not properly calculate their ability to repay, according to the Consumer Financial Protection Bureau.

Worried about legal repercussions, some lenders say they will make only qualified mortgages. Richard Cordray, director of the bureau, has says that the vast majority of loans made in today’s market would meet qualified mortgage requirements.

©2014 The Charlotte Observer (Charlotte, N.C.)
Distributed by MCT Information Services

Continue Reading 1 2

Have a comment on this article? Share on Facebook!

Join RISMedia on Twitter and Facebook to connect with us and share your thoughts on this and other topics.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Copyright© 2016 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com

Our Latest News >>