New mortgage lending policies are now being developed to classify mortgages and set the standards on who qualifies. While the intent is to develop rules “in the spirit” of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, what essentially happens is it becomes even more difficult for regular people to qualify for a home loan. From Real Trends,
However, the lower default rates, moving from QM to QRM come at a cost—the number of potential borrowers who would be excluded from the market. This is where real estate professionals and their customers really get whacked.
Items of concern include the elimination of 8.55 million qualified loans of the 19 million analyzed. Also excluded are minorities and low income buyers, “Even at a 3% down payment, 25% of low-income buyers would be excluded, and at 10% down payment, 50% would be excluded.”
Scary stuff coming around the bend. Looks like a lot of houses will sit empty.
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