Subprime Mortgage fallout in the news
The subprime mortgage meltdown continues with subprime lenders continuing to exit the business. If you are reading this blog, it’s unlikely that you have a subprime loan so why care about this? Here’s why:
Federal banking regulators are setting new rules on how home buyers qualify for adjustable rate mortgages. The old rule was that a borrower would qualify at an interest only payment on the starting note rate. The new rules require that the lender calculate the payment based on the fully indexed and fully amortizing rate even if the borrower is going to pay interest only on the lower note rate. This means that borrowers will qualify for less loan making it more difficult to buy or requiring more down payment. This will affect home buyers who are well above the sub prime category.
Read on to get the full story:
