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VA Loan News
A new era for the mortgage industry is about to begin. From the ashes of the 2008 financial crisis came a host of new rules and regulations meant to better safeguard homebuyers and minimize risky loans. There’s a new class of loans (called Qualified Mortgages, or QM) and a new regulatory body to oversee the industry (the Consumer Financial Protection Bureau, or CFPB).
Mortgage industry folks have been preparing for these changes for a while, but news is just now starting to sink in among prospective homebuyers. A lot of confusion and uncertainty has followed. Service members, veterans and military families across the country are starting to worry about how these changes and this new classification of mortgages might impact their ability to use their VA loan benefits.
Here’s the good news: You have nothing to worry about.
The VA loan program has been a model of safety and stability for decades. Most reputable lenders, including Veterans United, have been employing for years the kind of credit and underwriting requirements set forth by the CFPB. The bottom line is VA borrowers shouldn’t expect to see any negative impacts or limitations because of these changes.
In the aftermath, Congress sought a way to protect consumers and the economy at large. One of the results was the creation of a new classification of mortgages, known as Qualified Mortgages (QM). These loans are devoid of riskier features and meet a set of requirements aimed at ensuring the borrower can afford the loan they’re getting. Mortgages that meet the QM requirement will also help shield lenders from claims that they put a borrower into a bad loan all but destined for default.
Mortgage industry folks have been preparing for these changes for a while, but news is just now starting to sink in among prospective homebuyers. A lot of confusion and uncertainty has followed. Service members, veterans and military families across the country are starting to worry about how these changes and this new classification of mortgages might impact their ability to use their VA loan benefits.
Here’s the good news: You have nothing to worry about.
The VA loan program has been a model of safety and stability for decades. Most reputable lenders, including Veterans United, have been employing for years the kind of credit and underwriting requirements set forth by the CFPB. The bottom line is VA borrowers shouldn’t expect to see any negative impacts or limitations because of these changes.
Explaining Qualified Mortgages
The new class of mortgages is all about safety and affordability, two long-time hallmarks of this 70-year-old VA loan program. Throughout the 2000s, some lenders made a ton of money providing home loans to people with poor credit and no realistic chance of repaying the loan. Those subprime loans played a major role in the financial crisis and ensuing collapse of the housing market.In the aftermath, Congress sought a way to protect consumers and the economy at large. One of the results was the creation of a new classification of mortgages, known as Qualified Mortgages (QM). These loans are devoid of riskier features and meet a set of requirements aimed at ensuring the borrower can afford the loan they’re getting. Mortgages that meet the QM requirement will also help shield lenders from claims that they put a borrower into a bad loan all but destined for default.
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