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-- -- -- -- You think now's the time to buy a house but there are some new mortgage rules to go in effect in a few days got to be careful so what are these new rules and will they help.
The consumer or will they help -- banks joining us now is real estate expert and staff writer for Forbes working -- Morgan welcome.
Thanks for having great daddy you're so -- -- we understand that these new rules are designed to keep people from borrowing more than they -- payback that's a novel approach.
It sounds very obvious but until this week we haven't seen this regulation on the books basically to take away here this is this isn't the first rule -- stems from Dodd-Frank the first -- several that we're gonna see.
Coming out from concerned consumer bureau that's gonna basically streamline mortgage process -- -- not ordinarily gonna change the landing scenario we already sort of see in place right now -- economic downturn.
But the idea is to prevent another housing bubble and other sub prime mortgage and that's.
Where we got into trouble last time we we.
Gave mortgages to people that couldn't repay it sowed doubt you've got to be able to repay at what is the debt to burden racial have to be now.
So that that's a -- ratios.
Now 43% what that means is that you the prospective buyer can't have more monthly bills.
That and monthly bills that.
Are that it's cedar equal 43% of year pretax aren't happening come and -- got to prove that.
Yes you have to prove that so there's a criteria now.
I you have to show your credit history -- the show your employment status here income assets.
Think that you would think automatically go with -- applying for a mortgage for the new rules is no more high fees that sounds good how does that work I think it's really -- in the cap office 3% what that basically means is you the bar where.
-- to get that mortgage won't be paying more than 3% of the line.
What is out there it's it's no more.
Teaser rates are we being -- So we -- with a sub prime mortgage crisis and all of the lax lending that -- up to that crisis.
We saw a lot of exotic loans a lot of toxic aspects of these lines one of the things -- salaries.
Misleading only low teaser interest rates there that you know people qualified for that -- history -- can take out loans and media eventually they couldn't afford.
So -- -- of that.
The last rule is no more exotic -- yes sounds intriguing -- -- exotic alone so these are loans where its interest only mortgages or loans -- balloon payments.
Islands that exceeds thirty years and the duration of the -- in -- anymore these are going to be basically the -- -- the take away here is qualified mortgage.
That's going to be a turn you're gonna hear a lot more at and that's going to be now the industry standard.
What do you think of the new regulations is a better for us -- the bank.
I think remains to be seen I think this is actually in general I think this is pretty good.
This is coming on the heels of two other mortgage related settlements with private lenders this week.
I think all of this is going to provide -- more confidence in the market place.
For some of these lenders to stop looking back at everything that's happened in the last six years and start moving forward and start lending to people -- -- right now -- -- Oh it's below while thirty year fixed as well below 4% now and stay there for the year I think -- again upward -- thanks so much and that's thank you.
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