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.

Capital One® Platinum Prestige Credit Card
View Offer

Capital One® Platinum Prestige Credit Card

Top Features: 0% Intro on Purchases and Balance Transfers until February 2016

Editor Rating:

Chase Slate®
View Offer

Chase Slate®

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

Editor Rating:

Capital One® Quicksilver® Cash Rewards Credit Card
View Offer

Capital One® Quicksilver® Cash Rewards Credit Card

Top Features: 1.5% cash back on all purchases, 0% intro on purchases and balance transfers until August 2015

Editor Rating:

Barclaycard® Ring MasterCard®
View Offer

Barclaycard® Ring MasterCard®

Top Features: Low 8% (V) APR on purchases and balance transfers

Editor Rating:

Capital One® Venture® Rewards Credit Card
View Offer

Capital One® Venture® Rewards Credit Card

Top Features: Unlimited 2x miles on every purchase, every day

Editor Rating: