Posted on 01/10/2013 5:49:59 AM PST by SoFloFreeper
The Consumer Financial Protection Bureau is planning a Thursday morning announcement of new lending rules that it hopes will move the mortgage market toward a sustainable middle ground, somewhere in between the free-wheeling days of no-documentation loans and the current, restrictive environment.
For most borrowers, the rules will mean no more interest-only mortgages, no more loans where the principal due increases over time, no more loans that carry a balloon payment and no more loan terms of more than 30 years. In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.
These so-called qualified mortgages are expected to be embraced by lenders, because by following the criteria, they will have a better chance of shielding themselves from lawsuits from consumers whose loans go bad.
(Excerpt) Read more at my.chicagotribune.com ...
But you watch: special “executive orders” will be written for Obama Morons affected by Sandy, or buddies in Chicago......there are always exceptions for sycophants.
I am running a commune myself for my adult children, lol
As for the people who were screaming they were “suckered”, they were simply repeating what their leader (in the White House) and his Party were saying in numerous speeches.
Looking at it from the other side, if these new government dictated regulations towards real estate financing are so good, why not apply similar rules to auto loans, credit cards, student loans and all business loans?
I’m sure that the Attorney General will figure out a way to sue the banks for being racist in not giving loans to people who don’t qualify, if they are also a ‘protected victim group,’ and/or saying that the old rules that were enacted under Bill Clinton (forget the name of the senator and congressman the bill was named for) that started the entire mortgage problem with banks sued for ‘racial redlining’ of those who didn’t actaully qualify for mortages and being forced to issue them.
“In my day it was 28-36 and no more.”
Conventional, right? 28% PITI, 36% total monthly debt?
But FHA (govt guaranteed) was a higher (looser) ratio, with potential of financing in closing costs up to 103% LTV. I don’t remember the ratio.
Of course, FHA fell by the wayside when subprime loans kicked in.
Now, FHA is the new subprime with the same problems.
This is a terrible thing.
The Fed Gov't has gone from over-regulating in one direction to over-regulating in the other.
You say people can't take responsibility. The problem was the Government was MANDATING that banks push sub-primes. It was the Gov't who was responsible not the people.
Now the Gov't is saying banks should NOT push loans.
Give banks freedom to loan where they will. Banks don't like to lose money; it's Fed mandates that force them to do just that and the consumer suffers from tighter credit. Banks are best able to gauge what local conditions are like and how much money they can safely loan out and Fed regulations screw that up for banks AND the consumer.
These rules with a few exceptions will also apply to a seller financed transaction. Making an individual go thru the same hoops as a bank. That at least was how the initial draft was written. I need to see if that stayed in the final proposed rule.
Makes ya wonder how we survived with so many options available before this brain trust came into being.. CFSB
Cuomo make any comments on it yet?
typical big gubamint agency.. another unelected bureaucracy of Geithner replacements in training.
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