A member of North Carolina's congressional delegation has come out with a statement listing some worries he has about the new mortgage rules announced today that will restrict who will qualify for a loan.
The Consumer Financial Protection Bureau rolled out a rule today known as the "Ability to Repay" rule, which seeks to make sure nobody is issued a loan they won't be able to afford. A new category known as "qualified mortgages" will adhere to strict debt-to-income ratios and other measures. Banks that issue qualified mortgages will be protected from lawsuits.
U.S. Rep. Patrick McHenry, a Republican who lives in Denver, N.C., and a member of the House Financial Services Committee, said he's concerned about the new rule.
McHenry's statement:
“As our economy continues to rebound, it’s critical that housing policy appropriately balances consumer protections with sufficient access to credit for consumers. While it is good to see the CFPB decided to grant ‘safe harbor’ protection, I remain concerned that this one-size-fits-all definition will regulate out of existence legitimate lending to worthy consumers. I would hate to see young, first-time homebuyers who are just getting their financial start denied lending because of over-zealous government regulations.”
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2 comments:
"To obtain a qualified mortgage, a borrower cannot have a debt burden that amounts to more than 43 percent of income"
If you have a better idea, Congressman, we'd all like to hear it. Otherwise, using 43% of income to service all debt still seems quite high to me for a *qualified* mortgage backed by law (and the govt).
I suspect 35% would make your head explode.
Well, I think that this new rule is absolutely right and I don’t see anything to criticize. Lots of people across the US complain that they are struggling with the debt and can’t get out of financial crisis. So I think that before approving someone’s loan application it’s extremely important to make sure that this person is able to pay it back. It’s not right to give out loans or advance money to people whose income is not enough to pay off the debt. Furthermore, mortgage is a long term debt and the borrower should be ready to make payments during all the repayment term.
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