Yesterday, the Consumer Financial Protection Bureau (CFPB) issued a new rule to protect consumers from irresponsible mortgage lending. The rule requires lenders to make sure that prospective buyers are able to repay their mortgage. It also protects borrowers from risky lending practices that contributed to the 2008 housing collapse.
Leading up to the mortgage crisis, some lenders gave mortgages to consumers without considering whether they could repay the loans. The deterioration in underwriting standards led to more mortgage delinquencies and foreclosures.
Click here to learn more about the CFPB rule changes.