New lending rules intend to protect homebuyers and lenders
The government is creating new rules for mortgage lending. They were just made public Thursday.Photo: Video by ktnv.com
Las Vegas, NV (KTNV) - The government is creating new rules for mortgage lending. They were just made public Thursday.
The Qualified Mortgage System is aimed at protecting consumers and lenders. New government rules dictates borrowers must now meet several criteria to get a qualified mortgage, including having enough income and assets to repay the loan, a minimum credit score and the ability to pay all home-related expenses like property taxes. That includes other debts like credit cards and student loans.
It's also designed to shield lenders from lawsuits not hold back the amount of loans or decrease commissions.
"I think that it will ensure that borrowers that aren't ready to borrow yet get prepared. I think it's going to on a long term basis insure the stability of the borrowers and the future homeowners," says Michelle Johnson with the Financial Guidance Center.
The new rules kick in on January 21, 2013, but lenders have 12 months to implement them.