Mortgage Lenders Tighten Requirements Ahead of QM Rule
Many lenders are not waiting for regulators to define what a qualified mortgage is and instead are writing their own rules. Most notably, they are being super strict about debt-to-income ratios, which is limiting some borrowers from getting a home loan. Higher credit scores and stricter documentation requirements also are restricting access to credit. The Consumer Financial Protection Bureau is expected to finalize a rule in January requiring that lenders verify a borrower's ability to repay a loan unless the loan falls under the definition of a qualified mortgage. The qualified mortgage provision is expected to establish a general set of standards about a borrower's ability to repay a mortgage, including debt ratios and employment status.
From "Mortgage Lenders Tighten Requirements Ahead of QM Rule"
American Banker (10/08/12) Berry, Kate
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