Mortgage rules leave lenders scared to lend

[Geee]

Washington Examiner:

Federal rules are scaring home lenders from making loans to anyone without excellent credit, a dynamic that top economic policymakers say is holding back the nation's economic recovery.

 

New surveys of lenders suggest that a mortgage rule implemented by the Consumer Financial Protection Bureau at the start of the year is restricting credit availability, American Bankers Association Executive Vice President Bob Davis told the Washington Examiner.

 

One-third of bank loan officers said in response to a Federal Reserve survey that their approval rate for mortgages was lower than it would have been if the CFPB’s rule had not been in place.

 

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Similarly, 74 percent of lenders told the government-run mortgage buyer Fannie Mae that their operational costs increased because of the rule, and 36 percent said they tightened credit standards in response.

The CFPB’s rule, known as the Qualified Mortgage rule, was created as part of the 2010 Dodd-Frank financial reform law to prevent the kinds of abuses by lenders that led to the subprime crisis.

[Cyber_Liberty]

It's not just the mortgage lenders. Try and finance a new car these days.