According to a report in the New York Times,
The mortgage industry is bracing for the coming of “Q.M.,” the new federal rules defining a “qualified mortgage” — or one underwritten to standards deemed safe for consumers. The implementation of Q.M. poses a compliance headache for lenders, though the average borrower is unlikely to notice any difference when the rules take effect in January. The most immediate differences will be felt by borrowers at the higher and lower ends of the income scale.
Among the basic criteria: A Q.M. loan must be fully amortizing with a term no longer than 30 years, and the points and fees paid by the borrower cannot exceed 3 percent of the total loan amount.
Lenders must also document the borrower’s ability to repay the loan, and confirm a debt-to-income ratio of no more than 43 percent.So, what does this mean for Mr. and Mrs. Borrower? In our opinion, tighter controls on borrowers as to income, etc. In other words, lenders will be afraid to lend money to folks looking to move into their first home that doesn't qualify for some sort of first-time homeowner program, or folks trying to move up in home size.
What we find puzzling is that the Federal government offices overseeing mortgage and bank lending are just getting bigger and bigger, and less people are able to borrow.
Read the full story.
For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.
For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow AT vested.com
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