Preparing for Changes in Mortgage Lending Rules in 2014

March 27, 2013

There are a few important changes the Federal Government is implementing next year as it relates to Mortgage lending guidelines.

Sometime in January 2014 the maximum debt ratio will most likely be limited to 43%.  Knowing that big brother will be watching, I assume that underwriters will want to limit to say 41% for a margin of error to insulate from future liability.  This move will take a lot of borrowers out of the market as new buyers will not qualify to purchase homes across the country and in the Twin Cities marketplace.

Get ready for G-fees to go up again.  Don’t know what a G-Fee is?  It’s a tax on every homeowner in the US that has purchased or re-financed in the last 3 years by using a Fannie Mae or Freddie Mac backed home loan.  It’s an additional fee built into the price of the loan collected by your government. We’re not talking about peanuts here either, as the fee represents almost 1% of every dollar borrowed (i.e $200K=$2000.00).

FHA Upfront Funding Fees and monthly Mortgage Insurance Premiums have risen and headed higher.  They already are crazy high.  Clearly, HUD is trying to discourage or limit new loans by increasing the price.

A 3-day recission period on purchase transactions?  That’s the rumor and hopefully this one gets shot down as it would create a logistical nightmare in selling or buying a home.



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