Industry NewsMortgage

New mortgage rules could crimp lending

Lenders likely to demand larger down payments from buyers in high-cost markets

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

Though the new "ability to pay" (aka Qualified Mortgage or QM) rules released last week by the Consumer Financial Protection Bureau drew extensive media coverage, there are still widespread misunderstandings about how they'll work in practice. That probably shouldn't be a surprise since the regulations weighed in at a chunky 804 pages. So what are the rules going to mean for real estate professionals and their clients? Here's a quick overview of a few issues of concern. Start with the potential impacts on underwriting during 2013, well before they officially take effect next January. Will lenders finally begin loosening up a little? After all, since 2010 they've been telling us that one of the key reasons for their ultra-strict underwriting is the "regulatory uncertainty" flowing out of the Dodd-Frank financial reform legislation -- the risk that federal agencies will impose new mortgage rules that open banks up to costly lawsuits by defaulting consumers. Well, n...