Effective January 10th, the Federal Government implemented new rules to ensure that borrower's don't get stuck with mortgages they can't afford - and the nation doesn't fall into another housing crisis.
The new rules create a special category of qualified loans that have even higher standards. With these types of mortgages, a borrower's debt to income ratio has to be less then 43% and the loan can't have risky features like negative amortization and interest-only payments.
Points and fees will be limited - no more then 3% for a loan of more than $100,000.
There are also welcome changes for distressed homeowners.
Mortgage servicers will now have to call you by the time you are 36 days late on your payments and with limited exceptions, servicers cannot initiate a foreclosure until you are more then 120 days delinquent.
Finally, if you're having trouble making payments, your loan servicer will have to work harder to help find a solution.
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