San Diego, CA (PressExposure) November 01, 2006 -- The federal government says mortgage lenders need to toughen mortgage standards. The new rules will mean more paperwork when it comes time to borrow -- and for some borrowers, less ability to get the loan amount they want.
Adjustable rate mortgages (ARMs), interest-only loans, piggy-back financing and stated-income mortgage applications are about to get a make-over under orders from federal regulators. The new rules will mean more paperwork, tougher mortgage qualification standards and even smaller loans for many borrowers.
"The federal government is putting an end to the urban myth of instant mortgage lending," says Peter G. Miller, author of The Common-Sense Mortgage and a columnist syndicated in more than 80 newspapers. "The government is saying that borrowers need a much better idea of how loans work. The government is also saying that mortgage lenders need a much better idea of whether or not borrowers are really qualified for today's new forms of financing."
In his latest column for Mortgage Lenders Plus.com, Miller shows how borrowers can do well under the new standards. "It's really a return to the loan standards we had prior to 2001," says Miller. "With a little preparation most borrowers will be able to easily sail through the new requirements."