Proposed mortgage rules may have limited immediate effect

While new mortgage rules may make it much more difficult for consumers to qualify for a mortgage a few years down the line, analysts say its immediate effects for those looking at Houston homes will likely be limited.

The new qualified residential mortgage - or QRM - standards force banks to hold some of the risk from loans which don't meet those requirements. They were designed to keep lenders from making riskier loans and then selling them to investors.

According to the regulations, in order to be exempt, loans must have at least a 20 percent down payment. Borrowers would also need to have a strong credit history, and could not have fallen 60 days behind on any account over the previous two years.

But any loans made through the Federal Housing Administration, or sold to Fannie Mae or Freddie Mac will also be exempt. Since that accounts for roughly 90 percent of current loans, analysts said the immediate impact on consumers will be limited.

But when Fannie and Freddie are phased out over the next several years, loans will become harder to get. House Republicans have proposed a plan that would eliminate the two mortgage giants within five years.

Courtesy of 2M Realty News