The U.S. government's consumer watchdog group will be requiring lenders to ensure that buyers are able to repay their mortgage and protect borrows from risky lending practices. The Consumer Financial Protection Bureau's Ability-to-Repay rule, should go into effect January 2014, and addresses core factors that put our country in the mortgage crisis. In plain language....lenders who originated mortgages to consumers without verifying their ability to repay the loans!
More paperwork should protect borrowers from the risky lending practices that resulted in so many families losing their homes. This will "common-sense" rule can ensure responsible borrowers get responsible loans! Some of the new requirements include:
* Financial information must be supplied and verified
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* A borrower must have sufficient assets or income to pay back the loan
* Teaser rates can no longer hide a mortgage's TRUE COST
Find out what's happening in Avon-Avon Lakefor free with the latest updates from Patch.
The Ability-to-Repay rule will state lenders must issue "qualified mortgages" which shall include no excess upfront points/fees, no toxic loan features, and a cap on how much income can go to the debt. CFPB Director Richard Cordray stated "When consumers sit down at the closing table, they shouldn't be set up to fail with mortgages they can't afford."
Don't wait for 2014 to be a wise consumer! When you are purchasing a home
today, please ask questions and understand the details are in your mortgage
documents. Knowledge is the best way to avoid costly mistakes.
Keller Williams Greater Cleveland ~ Carol Murphy Team