New Rule Means Banks Will Have To Make Sure Borrowers Can Actually Repay Mortgages
When the housing market collapsed five years ago, it was due in no small part to mortgage lenders who handed out loans without really considering whether or not the borrower could ultimately pay that money back. Hoping to minimize the chances of this happening again, regulators have introduced a new rule today. The rule, announced by the Consumer Financial Protection Bureau and mandated by the 2010 Dodd-Frank financial reform overhaul, essentially requires mortgage lenders to ensure that prospective buyers have the ability to repay their mortgages.
Check out what Rick Santelli of CNBC said about these "new" rules, on either the thursday or friday broadcast, it should be available on their website or on youtube. Basically, he said it's a bunch of bunk and a lot of policies have been "grandfathered" in, meaning, you can still get a federally backed loan with a sub 600 credit score, no money down, etc.
Humbug! I went through a lot of trouble and jumping hoops to get my mortgage years ago.
The number one thing the banks were worried about was the fact that I was "self-employed" and as such they did not believe that I could repay my mortgage! I was denied a loan through the "MD Bond" program for that one reason alone.
I ended up borrowing my funds from a local bank -- a 20 year loan. Paid it off in full within 17 years.
having worked in the lending industry, mortgage and sales for the past 30 years; this story is a joke. No One should lend any money to anyone who doesn't have the ability to pay. this is really novel.
Check out what Rick Santelli of CNBC said about these "new" rules, on either the thursday or friday broadcast, it should be available on their website or on youtube. Basically, he said it's a bunch of bunk and a lot of policies have been "grandfathered" in, meaning, you can still get a federally backed loan with a sub 600 credit score, no money down, etc.
ReplyDeleteHumbug! I went through a lot of trouble and jumping hoops to get my mortgage years ago.
ReplyDeleteThe number one thing the banks were worried about was the fact that I was "self-employed" and as such they did not believe that I could repay my mortgage! I was denied a loan through the "MD Bond" program for that one reason alone.
I ended up borrowing my funds from a local bank -- a 20 year loan. Paid it off in full within 17 years.
having worked in the lending industry, mortgage and sales for the past 30 years; this story is a joke. No One should lend any money to anyone who doesn't have the ability to pay. this is really novel.
ReplyDelete