Gulf Shores mortgages, and your ability to qualify for one, will be affected by new servicing rules designed to provide homeowners with more information about their mortgages and their options, should those loans become unaffordable.
The new rules affecting Gulf Shores mortgages will force banks to verify a borrower’s ability to repay loans to ward off the kind of loose lending that helped push the U.S. economy into recession. The new rules would also protect borrowers from irresponsible mortgage lending by providing some legal shields for lenders who issue safer, lower-priced loan products.
The U.S. economy is still feeling the after-effects of the bubble, which sparked a global credit crisis after it burst in 2006. As the housing market imploded, banks sharply tightened the screws on lending, affecting not only Gulf Shores mortgages, but mortgages nationwide.
Because lenders are likely to want the heightened legal protection that comes with offering certain “plain vanilla” loans, the rules could go a long way in determining who gets a loan and who can access low-cost borrowing rates.
The consumer protection bureau said it would define “qualified Gulf Shores mortgages” as those that have no risky loan features – such as interest-only payments or balloon payments – and with fees that add up to no more than 3 percent of the loan amount.
In addition, these loans must go to borrowers whose debt does not exceed 43 percent of their income.
The new rules establish an additional category of Gulf Shores loans that would be temporarily treated as qualified. These Gulf Shores mortgages could exceed the 43 percent debt-to-income ratio as long as they met the underwriting standards required by Fannie Mae, Freddie Mac or other U.S. government housing agencies.
The provision would phase out in seven years, or sooner if housing agencies issue their own qualified mortgage rules or if the government ends its support of Fannie Mae and Freddie Mac, the two housing finance giants it rescued in 2008.
Regulators also proposed creating a qualified mortgage category that would apply to community banks and credit unions.
Banks will have until January 2014 to comply with the new rules.
For more on Gulf Shores mortgages and news that affects the mortgage market, click over to our Gulf Shores Mortgage Info link under the Gulf Shores Real Estate Categories.