Government announcing new mortgage lending rules

Sun Sentinel

Government officials are unveiling new mortgage lending guidelines designed to curtail risky loans that led to the housing bust.   

From the Chicago Tribune: For most borrowers, the rules will mean no more interest-only mortgages, no more loans where the principal due increases over time, no more loans that carry a balloon payment and no more loan terms of more than 30 years. In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.

While the new rules may keep some prospective buyers out of the housing market, the changes are necessary, said Jim Flood, regional manager of Supreme Lending in Plantation.

“Nobody wants to go back to where we were,” Flood said. “This will be a good thing in the long run for the safety of our industry.”

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