Not so fast, they are taking way too much credit for how resilient the industry really is. Once lenders figured out that they were much too loose with their guidelines they tightened them, actually too much in my option, but that is another story.
One of the so called new guidelines is a borrower must have the ability to repay the loan. Are they seriously going to take credit for what ALL lenders have already been doing the last 5 years?
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Conventional mortgages for the most part had a maximum debt ratio that was 45% and it is now supposed to be 43%. To me, a non-event as most lenders are not sticking to the 43%. Now that is what I call back to back to basics.
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There was so much talk about a 20% down payment requirement. Fannie Mae and Freddie Mac did away with their 3% down requirement and went to a minimum of 5%, VA and USDA still are no money down and FHA still at 3.5% down. Again, that is back to basics.
The CFPB is taking a lot of credit for what lenders figured out, on their own. This is just one more way that Washington is protecting the consumer, but I wonder from whom?
