2014 brings in a host of new changes to the world, and to existing mortgage rules. They are designed to help out homeowners, but if you’re not prepared for them, they might take you by surprise. In order to prevent another housing bubble (and collapse), the Dodd Frank law has been enacted to make getting mortgages safer. But, it might result in problems for small banks and narrower options for buyers. Les Christie at CNN Money says:
“Beginning Jan. 10, banks have to ensure that monthly mortgage payments are affordable, a result of the Dodd Frank law passed in 2010. The failure to do so carries strict penalties.
“My concern is that we’re going to be in an environment where some lenders are too small to comply,” said David Stevens, CEO of the Mortgage Bankers Association.
During the housing bubble, some banks issued loans without even checking applicants’ income or assets.
Under the new rules, lenders must carefully determine that borrowers have the ability to repay their loans.”