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New qualified mortgage rules could stifle smaller lenders’ willingness to lend
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New qualified mortgage (QM) rules enacted Jan. 10 could have the unintended consequence of impeding smaller lenders’ willingness to issue some home loans, The Wall Street Journal has reported.
The qualified mortgage rules defined by the Consumer Financial Protection Bureau (CFPB) were developed in response to the housing collapse of the Great Recession. Lax lending requirements resulted in prospective homeowners being issued home loans that they ultimately were not financially able to repay. New lending requirements attempt to prevent negligent lending in the future by placing the onus of the borrower’s ability to repay on the lender, with legal implications possible should a borrower default on loans that do not adhere to the qualified mortgage requirements.
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