CFPB Unveils Sweeping Changes to Mortgage Rules

Realtor Mag ^ | 1/10/13 | RealtorMag

[illiac]

The Consumer Financial Protection Bureau unveiled new mortgage rules Thursday that are expected to change how home buyers go about getting approved for a home loan.

Every company that issues mortgages will be required to follow the new guidelines.

Loans that meet the agency’s new lending criteria now will be called a “qualified mortgage.” Qualified mortgages will be given protection for the bank from lawsuits filed by troubled borrowers or buyers of mortgage-backed bonds.

A “qualified mortgage” will consist of the following: • Lenders must prove that income and assets are sufficient to repay the loan (this applies to jumbo loans as well). • Borrowers must be able to document their jobs. • Credit scores will have to meet a minimum standard. • Borrowers will have to be able to show that they can also still afford other debts associated with the home, such as home equity loans as well as property taxes. • Lenders will consider borrower’s other debts before issuing a mortgage too, such as student loans, car loans, and credit card debt. • Monthly payments must be affordable to the borrower.

Home buyers who fail to qualify for a “qualified mortgage” can still get a mortgage, but mortgage payments must not be more than 43 percent of the borrower’s pre-tax income.

[1010RD]

Loan documents used to be fairly easy to fill out. Now they’re called loan packages because they’re so thick.

This will further injure the housing market, but that’s the purpose of regulations.

[1010RD]

These regs are not needed. Get the Feds out of the banking business. We live in an age where you can get near instant transparency on any bank. Let the Feds set the simple capital ratios for lending and the market will do the rest.

[Jane Long]

Also, the CFPB plans to make some borrowers exempt from the new rules, such as applicants looking to refinance out of subprime adjustable-rate mortgages or some mortgages issued by non-profits that target low-income home buyers.

The new rules will take effect Jan. 21. Lenders have a year to fully implement these rules.

[skinkinthegrass]

LL!
sorry for the LOL; the CRA, was not developed/used to it's purported title.
Cloward-Piven Government
http://www.freerepublic.com/focus/f-news/2392458/posts

The Cloward-Piven Strategy, Saul Alinsky, and Their Influence on Obama
http://www.freerepublic.com/focus/f-bloggers/2756319/posts

It was used to Destroy the Integrity of the National Banking System and confidence of it's citizens.
It was used to "overload" the Socialist Welfare system. It was never never meant to Help the populace...
it was formulated to destroy (the present) civil order and replace it w/ a Fabian Socialist Society...
Which can't / won't work; we tried that in the early 1600s in New England, it failed....very badly.