Amendments made by the Consumer Financial Protection Bureau (CFPB) will go into effect in January. Amendments were specifically made to the Ability-to-Repay and Qualified Mortgage rules. Once January 10th, 2014 strikes, lenders will be required to follow these rules.

Based on a recent white paper that was released by CoreLogic, the Ability-to-Repay rule requires that lenders take eight key factors into consideration when deeming whether or not an applicant is eligible for a loan. This includes the applicant's current income and assets; current employment status; monthly mortgage payment; payment on any other loans secured by the property; monthly property tax and insurance payments; all debt obligations; debt-to-income ratio; and credit history.

If a mortgage is a "Qualified Mortgage" it must meet a list of requirements. As long as the loan meets all of these Qualified Mortgage requirements, it also will meet the Ability-to-Repay rule requirements. Qualified Mortgage requirements also set point and fee limits.

There has been debate whether these changes will slow down the lending market. However, CoreLogic believes that these rules are good and lenders should be determining if borrowers will be able to repay a mortgage before approving the loan.

If you are concerned about the new rules and how they will affect your ability to obtain a new loan, contact Prospect Financial Group, Inc. today by calling 858-605-0952.