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Mortgage Broker News | 31 Jan 2013, 09:00 AM Agree 0
Are brokers just plain wrong in criticizing the 2012 mortgage rule changes? Agent Paolo Di Petta says they are
  • Jason B | 01 Feb 2013, 08:05 AM Agree 0
    While in theory it may sound like a good idea but the truth is people will not stop borrowing and they will find the next best option which is more than likely a private lender. Which are in most cases neither cheap nor forgiving so what has been fixed here? Again what is being done with unsecured debt? Why not keep the 85% refi but condition it to payout debts only and actually close the paid debts? At least that is an idea that actually starts to tackle the real issue here of consumer debt load...Just a thought...
  • Peter Browne | 01 Feb 2013, 08:46 AM Agree 0
    You have some good points Paolo, but I feel that the reason why mortgage lending regulations tightened up so much is that they're easier to change than credit card regulations would be to implement. The big banks as well as private issuers of consumer credit would fight new credit card regulations as toughly as they can but can't fight changing the regulations that were already in existence. In essence, I feel that some tightening up was required but they went too far.
  • CC | 02 Feb 2013, 01:05 AM Agree 0
    I feel you have over looked how these changes have effect the clients that already have purchase their 1st home when we were offering 30 & 40 year amortization's and now would like to move.
    As you may know clients that now want to port their current mortgage they now must qualify at the 5 years posted rate and with a amortization of 25 years , if they don't qualify they have to pay the full outrageous penalty to re qualify at the 5 year discounted rate.
    Another issues is for clients that have a insured mortgage they should be able to port the remaining amortization period that they had when they first took out the mortgage. They did pay the extra premium for this option before the changes.
    My vote is to bring back 35 year amortization and 85% refinance option as this will help homeowners keep their home when rates do increase, also remove the new policy where clients must qualify at the 5 year posted rate for client's that are already in a fixed rate term
    One option for the government to slow down the housing market is make it that all buyers have 10% down .
    CAAMP is not only working on behave of the broker intdusry but is also the voice of the consumer.
  • Paolo Di Petta | | 02 Feb 2013, 01:10 AM Agree 0
    @Jason - The problem is that this isn't just a debt load issue. A lot of people have used the rapidly appreciating market to turn their home into an ATM. If we don't fix that problem, people will just keep rolling high interest unsecured debt into their mortgage.

    @Peter - You also have some good points, but the fact is going after the mortgage rules is the wrong approach. We (and I say as customers, not as Mortgage Agents/Brokers) need to go after the credit card companies and demand more. We should also invest more into financial literacy in the schools.

    The new mortgage rules will hurt some people, no doubt - but the longer we let it go, the more people will slip into debt, and the more people it will hurt. I'd argue these changes should have been made earlier. We shouldn't have ever had 40, 35, or 30-year amortizations to begin with.

    All the lax rules did was get people into the "monthly payment" mindset and give them access to more credit, which they've proven they simply can't manage responsibly.
  • Samantha | 30 Oct 2014, 06:36 PM Agree 0
    I used Darrin Robinson's Maximum Mortgage Calculator

    This will help the potential home purchaser determine their maximum approvable mortgage amount so that they don’t waste their time looking at houses outside their affordability. They will also be able to use the information to build a monthly budget.
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