When the Consumer Financial Protection Bureau passed its ability to repay and qualified mortgage rules, critics argued that its restrictions would make it more difficult for qualified borrowers to obtain a loan. But as it turns out, more than a year removed from when the regulations took effect, people are still able to get a mortgage fairly easily, a new report concludes.
Mandated by the Dodd-Frank Law, which was passed and signed into law a few years ago, reforming the financial services sector after the Great Recession, the CFPB enacted the ability-to-repay rules in order to stave off another housing collapse. Economists say that the high number of people who were unable to pay off their mortgage was a leading contributor to the country's worst recession since the Great Depression.
While borrowers are now required to provide more information justifying why they ought to be approved for a loan – such as proof of employment and a credit report – there's little to suggest that these mandates are excessively prohibitive, according to a study conducted by the Federal Reserve.
"The [Home Mortgage Disclosure Act] data provide little indication that the new ATR and QM rules significantly curtailed mortgage credit availability in 2014 relative to 2013," the report stated, as quoted by National Mortgage News.
Some aren't convinced, however, including the American Bankers Association. Bob Davis, executive vice president of the ABA, indicated that while the HMDA has good intentions, it's ultimately "misguided."
But other reports suggest that mortgage credit availability is expanding. For seven of the last eight months, the Mortgage Bankers Association's Mortgage Credit Availability Index has risen. In August, the latest month for which data is available, the measure reached 126.1, up 0.5 percent from July. The higher the number, the looser credit rules tend to be.
To receive a free quote, simply visit www.capwestmortgage.com/quote or call (866) 614-5959 to speak with a CapWest Mortgage representative today.