Lender Scrutiny of Borrowers Tighter With U.S. Mortgage Rule
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Lenders will for the first time be required by the government to verify borrowers’ ability to repay mortgages by confirming income and assets under a rule issued today by the U.S. Consumer Financial Protection Bureau.
The rule, mandated by Congress in response to lax underwriting standards before the 2008 financial crisis, will also offer some legal protection for lenders who follow guidelines for so-called qualified mortgages, according to an e-mailed statement by the bureau. The measure also insulates issuers of qualified mortgages at prime interest rates from future lawsuits.