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Mortgage Broker News | 16 Sep 2014, 07:06 AM Agree 0
We know that prices are increasing faster than incomes, and we know that market conditions are attracting people to become owners, but are too many people overstretching their household finances?
  • Mike Rice | 16 Sep 2014, 11:49 AM Agree 0
    it's unfortunate what the industry (yes both Lenders and Brokers) has done to the market over the last decade. It used to be that when you gave a client financial advice and told them they couldn't afford the payments, and truly did a budget and said you need to look for a smaller home they took your advice. Now what happens is they keep searching until somebody gives them what they want and Lenders and Brokers are chastized for not putting the numbers on the books. Debt service ratios are determined on pretax income and basic necessities like food and transportation are left out of the debt calculations, this totally overstates a person's ability to pay. It makes me wonder the reason why we need B-20 guidelines and the chnges proposed in this article is because "the industry" doesn't have the stomach to do it on their own.
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