Mortgage update for the week of January 7, 2013

This week may seem like a real yawn with only the initial Jobless Claims being released on Thursday, January 10, 2013.  

On Thursday we may hear from the Consumer Protection Financial Bureau’s about what defines a “qualified mortgage” (QM). From Bloomberg:

The qualified mortgage rule, mandated by Congress as part of the 2010 Dodd-Frank Act, is aimed at tightening lax underwriting that fueled the housing bubble. The regulations aim to protect consumers from mortgages they cannot afford by requiring lenders to take steps such as verifying income and assets. In return, lenders gain some protection from lawsuits.

Although having a “qualified mortgage” may sound like a does of common sense, we won’t know what we are dealing with until we learn about what constitutes a “qualified mortgage”. For example, currently an industry standard for a debt-to-income ratio is 45%, should the government decide that a DTI of 43% is required in order to be deemed a “qualified mortgage”, many Americans will find themselves not able to obtain a mortgage OR possibly paying a higher rate or fee for a “non-qualified” mortgage. I’m anxiously awaiting Thursday’s news from the CFPB.

If you are interested in refinancing or buying a home in Bellingham, Bellevue, Bainbridge Island or anywhere in Washington, I’m happy to help you!


  1. Marlene Jacques says

    How does the qualified mortgage rule relate to those who are currently paying their mortgage on time yet cannot refinance? If these people missed payments, they would be qualified for HAMP. So, the fact that they continue making their payments in time, should have been sufficient to qualify those who are currently homeowners in order to help them remain so, I would think that would have been better for the economy. Please tell me if I am making sense or not?

    • Hi Marlene,
      We should have more info about QM anytime. I would hope that it would not impact HARP or FHA streamlined refi’s.

      Hopefully HARP 3.0 #MyRefi becomes available soon.

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