“Dodd-Frank Regulations will Cause Higher Rates and Tougher Guidelines for Consumers”

The proposed QM (qualified mortgage) means that the highest debt ratio that would be allowed on all mortgages is 43%. The 43% would be the total percentage of all mortgage, installment and credit card debts. I am giving you a very simplistic overview.

Presently we are getting Conventional mortgages approved up to 47.9%, FHA loans up to 56.9%, VA and USDA loans up to 49%. These are very rough numbers, as there are many factors that go into these percentages, but you get the idea. What all this means, many will not be able to become homeowners or be able to refinance.

From everything I keep reading, there will be newer players coming into the market to fill in the gap. This will be the new “Subprime”. I can assure you, when the gap will be filled it will cost the consumer much more money. I knew there was a reason it is called the Consumer Financial Protection Bureau.

The CFPB is putting these regulations together and is hiring more people than any other government body in Washington these days. I wonder why that is?