If you’re in the market to buy a Boston condo you may want to read this article from the New York Times:
STATES have taken the lead in adopting laws to protect consumers from some of the problem loans that helped trigger the home foreclosure crisis, but the federal government is now stepping up its efforts.
On Oct. 1, new rules adopted by the Federal Reserve will go into effect, requiring greater diligence on the part of mortgage lenders and brokers who make so-called high cost loans for borrowers with weak credit. The interest rates on these loans are at least 1.5 percentage points higher than the average prime mortgage rate.
Some consumer advocates applaud the new rules but say they come too late to help many borrowers. Mortgage executives, meanwhile, have expressed concern that the changes could further dry up the mortgage market.
The regulations — finalized in July 2008 but only now being put into effect — bar lenders from making a high-cost mortgage without verifying that a borrower could repay the loan in the conventional way, and not simply through a foreclosure sale
Read the full story: New York Times
Did I just read the new rules are:
” Bar lenders from making a high-cost mortgage without verifying that a borrower could repay the loan in the conventional way…”
What a great idea.
File under: Duh?