DENVER (CBS4)- Federal officials unveiled new mortgage rules meant to reduce risky lending. The new rules unveiled Thursday are also designed to make it easier for borrowers to know exactly what they are getting into.
The new rules are designed to protect them from risky loans…and the banks from borrowers taking a loan they cannot afford.
It caps total debt payments at no more than 43% of a borrower’s income.
It mandates a consumer’s financial records be verified.
Bans interest only loan and limits large payments called “balloons” at the end of a loan.
The new regulations take effect next year.