CFPB Issues New Rules to Help Reduce Risky Mortgages

CFPB Issues New Rules to Help Reduce Risky Mortgages

Today, the Consumer Financial Protection Bureau announced new mortgage rules that aim to reduce risky lending and make it harder for some consumers to qualify. The rules also look to ensure that borrowers can repay their mortgage loan.

Gone are the deceptive teaser rates or loans that required no documentation for borrowers. Lenders are prohibited from making loans if the borrower will have total debt that exceeds 43 percent of income.

The rules also restrict interest-only loans, balloon payments or negative-amortization loans. Banks can make these loans, but they won't be protected from potential borrower lawsuits. Mortgage originators will be restricted from charging high upfront points and fees.

The CFPB hopes these rules motivate banks to lend again. The rules also provide legal protection to lenders that follow the rules.

The rules take effect in January 2014.

Discover it® Apply Now

See Details

Discover it®

Special Offer: 0% Intro APR* on purchases and balance transfers for 14 months

Editor Rating:

Chase Slate® Apply Now

See Details

Chase Slate®

Special Offer: 0% intro APR for 15 months plus no balance transfer fees within the first 60 days

Editor Rating:

Chase Freedom® Apply Now

See Details

Chase Freedom®

Special Offer: $100 bonus after you spend $500 on purchases within the first 3 months of account opening plus 0% intro APR for 15 months!

Editor Rating:

Barclaycard Arrival Plus™ World Elite MasterCard® Apply Now

See Details

Barclaycard Arrival Plus™ World Elite MasterCard®

Special Offer: Earn 40,000 bonus miles if you make $3,000 or more in purchases in the first 90 days from account opening - that equates to $400 off your next trip!

Editor Rating:

Barclaycard® Ring MasterCard® Apply Now

See Details

Barclaycard® Ring MasterCard®

Special Offer: Low 8% (V) APR on purchases and balance transfers

Editor Rating:

X
Take the survey