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January 14, 2013

Originations: How Lending Looks Post Crisis

January 14, 2013

Originations: How Lending Looks Post Crisis

Today’s Originations linkfest is two parts: the 2013 housing outlook and new regulations for mortgage lenders. The latter can most simply be summarized as follows: The Qualified Mortgage rule (aka QM) is the CFPB’s first major regulation and it requires lenders to follow specific parameters to prove a borrower’s ability to repay a loan. This was required by Dodd Frank and, though it just went through last week and is effective January 10, 2014, it simply formalizes the strict manner in which loans have been underwritten since credit markets froze in 2008. However there are significant legal risks for lenders who don’t follow this rule properly, and it does impact consumer product choices because it creates big litigation risk for certain basic loan features like interest-only. I’ll comment more on consumer impact, but for now, these links provide the best primers.

NEW “QUALIFIED MORTGAGE” (aka QM) REGS
– Actual Qualified Mortgage Rule from @CFPB (Full Text of Final Rule)

– Summary of QM Rule via @housingwire (Executive Summary of final rule)

– Beware The Escape Hatch In The New Mortgage Rules (John Carney, CNBC)

– Industry Groups React To New QM Rule (MortgageNewsDaily)

– QM Rule Leaves Debt-To-Income Ration Door Open (MortgageNewsDaily)

– Why CFPB’s New Mortgage Rule Matters (Danielle Douglas, WashingtonPost)

– Tougher Rules For adjustable rate mortgages (AnnaMaria Andriotis, Marketwatch)

2013 HOUSING OUTLOOK
– Post crisis overview of home lending (Tom Braithwaite, FT)

– Hot apartment market keeps rents rising (Eliot Brown, WSJ)

– Housing will continue to lead recovery in 2013 (Todd Sullivan, ValuePlays)

– 5 Housing Issues To Watch In 2013 (Nick Timiraos, WSJ)
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Follow The Authors:
@aandriotis, @mortgagenewsMND, @DaniDougPost, @carney, @TBraithwaite, @eliotwb, @ToddSullivan, @nicktimiraos

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