New Mortgage Rules Give Small Banks a Chance
January 11, 2013
The government released new mortgage rules on Jan. 10 that say consumers cannot obtain a "qualified" mortgage if their debt-to-income ratio exceeds 43 percent. The new terms are causing some concern for consumer advocates, who worry that the steep threshold will block access to credit for first-time or low-income home buyers. But the Consumer Financial Protection Bureau (CFPB) also has proposed an exemption for lenders with fewer than $2 billion in assets. In order to receive the exemption, the banks would have to keep the loans on their books rather than sell them to investors. In announcing the exemption, the CFPB conceded that homeowners taking out these types of loans will have to meet tougher standards but added that the mortgages likely will have lower rates and fewer fees.
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