This would put over 100,000 loan officers/mortgage brokers out of business. And it would make it much more difficult for low income borrowers to buy homes. This must be stopped!
And not to mention the effect of home values. If you thought your house value was down now just wait.
The very first incling I got that this was going to be bad was several years ago when my wife was a real estate agent. At that time, to get a mortgage the total payment could not be more than around 30% of your DOCUMENTED take-home pay. It had been around that level for as long as I can remember.
Then the rule suddenly changed and it became 50% of your DOCUMENTED take-home pay. I said to her that the industry was pumping previously unqualified buyers into the market and it will increase prices.
When you look back on it, I should have bought all the homes I could as investments. Who knew that those days of 50% would seem downright stifling compared to the drunken sailors rush we digressed to. The writing was on the wall way back then. I just didn’t realize how silly the whole thing would get.
We will all suffer the consequences - some more than others.