From RealTrends.com: Some buyers shopping for a luxury home are hoping to close the deal before Jan. 10. That is when new rules are scheduled to take effect that will tighten lending standards.Issued by the Consumer Financial Protection Bureau (CFPB), the changes are designed to curb loose practices that triggered the real-estate meltdown. Under them, lenders are encouraged to underwrite only “qualified mortgages” that meet the tougher standards. Those that don’t could face a lawsuit from borrowers if they default on the loan down the road.
Essentially, borrowers in 2014 will receive little leniency when digging out tax returns and documenting assets and potential earnings, says Tom Wind, executive vice president of residential and commercial lending at national lender EverBank. “From an industry perspective, most lenders are going to say, ‘If I’m going to take on additional risk, I need to be even more careful who I lend to,’ ” he says.