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Mortgage Overhaul Begins With Borrower Scrutiny Measure

The publication of a rule requiring mortgage lenders to confirm a borrower’s ability to repay is the start of an effort by U.S. regulators to reshape the market blamed for sparking the 2008 financial crisis.

The Consumer Financial Protection Bureau is set to follow yesterday’s rule on mortgage underwriting with a second mortgage-related rule, this one on servicing, at a hearing in Atlanta on Jan. 17.

The rule is “a key first step of housing finance reform” by this and other agencies, said Tim Ryan, the outgoing head of the Securities Industry and Financial Markets Association.

“I think that will be a game changer in the market because consumers will be able to see in a single document the main key points they need to know without all of the fine print that has often obscured and confused consumers,” Richard Cordray, the CFPB’s director said in a Bloomberg Television interview yesterday. Lots more at http://www.bloomberg.com/news/2013-01-11/mortgage-overhaul-begins-with
-borrower-scrutiny-measure.html

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