- Posted January 26, 2014 by
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The Qualified Mortgage & Consumer Financial Protection Bureau (CFPB) Explained
Hi My name is Philip Ganz I am a loan officer. I made this video to help you get prepared when buying a home and understand upcoming major changes in our industry.
On January 10, 2014 new mortgage regulations will go into effect set forth by The Consumer Financial Protection Bureau (CFPB). The CFPB was formed in January 2012 by The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 which was a result of the mortgage crisis.
Lenders, Banks, and Financial Institutions have an incentive to lend within a box of standards called "Qualified Mortgage." If the lender goes outside of the "box" and the borrower defaults the lender has limited legal protection.
Within the Box of items the biggest changes is the reduction of Debt to income ratio lowered to 43%. Underwriters are given some flexibility in assessing all attributes of the loan, but must thoroughly document that income is adequate to cover ALL obligations.
If you are currently pre-approved you want to make sure you qualify with the tougher standards and speak with your lender.
I hope this video was helpful! If you want to know more about this or other important information mortgage information I am here for you!