Watchhttp://www.centralvalleybusinesstimes.com/stories/001/?ID=22635
Consumer Financial Protection Bureau issues rule • Says it will protect consumers from irresponsible mortgage lending The Consumer Financial Protection Bureau has adopted a new rule that it says will protect consumers from irresponsible mortgage lending by requiring lenders to ensure prospective buyers have the ability to repay their mortgage.
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Boca Raton, FL
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The vast majority, if not all, of the people who received mortgages they couldn't repay, applied for such mortgages expecting to flip the house before they ran out of money. They aren't victims but gamblers who drove house prices out of reach for everyone else. They do not deserve our sympathy.
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tvgnus says
how about irresponsible home bidding and irrational exuberance on home prices.
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This was needed 10 years ago. As of 2010, when I got my mortgage, meeting the requirements were like being micromanaged by a control freak on crack. They literally wanted a full snapshot of my finances every single day. If one single deposit was made in my bank account that did not come from pay roll. I had to get a copy of it, produce notarized letters explaining where it came from and why I deposited it into my bank. My wife deposited a check from our daughter and gave her cash for the check. We had to make a receipt of the cash changing hands, and get it notarized, like were a check cashing store. Why can't you cash your daughters check with out it being the Spanish inquisition? It was really stressful, it almost felt like they were screwing with you, and they had no intention at all of ever approving the loan. Every single morning when I would wake up, expecting positive news I would go through the same routine again that consumed most of my day the day before. I was working from home, so a lot of it, was easy. I wonder how working people in a demanding job ever close on a house.
Now of course this was for a FHA loan, perhaps they mean, they will make banks get as rigorous on all mortgages.
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This is ridiculous.
I have paid between $2000k and $3000k for rent for 12 years in California. This should be all the evidence I need. I have made as low as 33.5k a year, and am now in 6 figures. It is irrelvant how the rent/mortgage is paid, the important point is at no time in the last 12 years have I failed on my commitment to pay for my shelter.
Before I start, I realize the importance of a free market. However I feel housing should have some protections against what we are seeing these days.
I say we need the following.
1. Hard cap on Real Estate commission. No longer % but a fixed cost. This will prevent greed in pricing.
2. County/State regulated appraisers and inspectors. No more appraisers in the pockets of either the banks or buyers/sellers.
3. If you have never been late on a payment, and say you can commit, then that word should trump counting coins. Payment history should be far more important that debt/income ratio (although important).
4. A established guideline that places a premium on those who purchase property for primary residences. In this country we should place a premium on those who want to purchase shelter for primary houses, not to flip, rent, or resell. I don't know what this guideline is, but perhaps a tax credit to the seller if they choose someone who makes the home their primary residence.
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Baltimore, MD
Article is missing down payment requirements.