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FBN's Liz MacDonald breaks down the new rules banks must follow to lend money for mortgages.
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The government has finally unveiled new rules to stop mortgage abuses that of course there are part of the financial collapse in 2000 night.
The new rules are aimed at protecting mortgage borrowers but they do much more yeah on the usher in a whole new world of mortgages so what does it mean well for you Elizabeth MacDonald has small.
That's -- -- today.
-- N -- Talladega and they are actually usher in a new term for mortgages called.
The qualified mortgage.
And here's what a top government regulator -- G -- today told a very rich -- about these new rules he's with the Consumer Financial Protection Bureau.
Which issued the new mortgage rules take a listen.
Lots of mortgages that were made in defiance of traditional standards and conservative discipline and common sense.
And putting some common sense rules of the road in place.
So that that doesn't happen again is a big part of what -- yet -- is trying to.
It done all right so here -- hear the new rules -- and -- and here's that banks must.
Legally by law now verified check this stuff.
-- got to verify a borrower's ability to repay that means it and it looked into and verify and document income assets credit history.
Other -- -- child support loans and credit cards also job status and this is.
Making banks legally responsible to verify this information is -- corrected Dodd-Frank.
And so the other thing -- -- look at this bit about banks are gonna have to offer no longer toxic loan features like those no -- or no interest loans they've basically also have to make sure that debt payments cannot equal more than 43%.
Of other persons are Barber's income they capped the points and fees at 3% of loan -- -- still on this that they issue what's called the qualified mortgage they will be shield her from lawsuit they got to make -- lawsuits future losses from -- We gotta make sure those are prime rate loans doesn't stop but lenders and is street.
Sub prime loans but the bottom line here is -- McConnell.
That this could make it harder for first time bar were -- low income borrowers to get loans and they also standardized the plain Vanilla thirty year long back to that.
No money no job lots of debt -- the mortgage.
Problem candidates Manhattan thank you thank you as sure.
