A residental mortgage lender licensed in 40 states, WEI Mortgage Corporation furnishes a high professional standard of financial products and services to a diverse range of residential clients. For more information about WEI, including a message from President Wesley Yuan, please visit www.weicorp.com.
Recently, the Consumer Financial Protection Bureau (CFPB) unveiled its widely anticipated rule heighten mortgage standards for consumers and reduce lender liability. These regulations require loan providers to verify the capacity of each borrower to repay his or her debts before a loan is approved.
The CFPB aims to shield people from deceptive lending practices and to reassure financial institutions concerned about lawsuits. These lenders understandably display a reluctance to extend loans in fear that borrowers might seek legal redress when they come up short on payments.
The new standard for mortgages, called the Qualified Mortgage, was mandated by the Dodd-Frank Act and takes effect in 2014. It explicitly bans certain problematic loan features, including once-prevalent interest-only payment schemes that fueled the housing crisis. If lenders make Qualified Mortgages, they are shielded by a “safe harbor” from borrower lawsuits in the future. This rule has been applauded by both industry and consumer groups as a way to help borrowers know that they are receiving a loan that they can repay.