The Consumer Financial Protection Bureau on Thursday announced a new rule that require lenders to ensure prospective buyers have the ability to repay the mortgages offered to them.
The rule prohibits risky lending practices, such as “no doc” and “interest only” offerings, that led to widespread foreclosures and fueled the 2008 housing collapse. A first for government agencies, the CFPB has also defined the criteria for loans designated as a “qualified mortgage.”
