Mortgages Get New Rules

If you need a mortgage to buy a home this year, the government wants to make sure you can pay back your loan.

That’s why on Jan. 10, the Consumer Financial Protection Bureau implemented new mortgage-lending rules that federal regulators say will protect against the risky lending practices that powered the housing bubble and caused a huge collapse in home prices that led to the Great Recession.

For most home loan borrowers, the new rules will have little or no impact on whether they can get a mortgage, experts say, because loan standards have already been tightened.

“They want to make sure lenders are giving loans to borrowers who can afford to pay back those loans,” said David Neylan, vice president of correspondent and wholesale lending at Guild Mortgage, which is based in San Diego.

Here’s a look at the new rules and what they do:

Q: What is new?

A: The big term you need to know is qualified mortgage, or QM. A qualified mortgage meets new guidelines, and consumers who get them are expected to meet ability-to-repay requirements. If lenders make qualified mortgages, they have more protections against lawsuits should the loans later go bad.

read more:  http://www.utsandiego.com/news/2014/jan/31/qualified-mortgages-cfpb-fannie-freddie-loans/

disclaimer: for information and entertainment purposes only

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