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Fannie Mae and Freddie Mac: New Qualified Mortgage Rules Approaching

loansafe.orgJune 20, 2013

By Alex Ferreras

(LoanSafe.org) - According to the Federal Housing Finance Agency (FHFA), the mortgage giants Fannie Mae and Freddie Mac have announced that starting next year, their purchases on loans will be limited. This new limitation will only include loans that meet a federal qualified mortgage mandate.

The new rules that define a ‘qualified loan’ were established earlier this year. One essential new rule is that lenders must verify the borrowers’ ability to repay the loans. These qualified mortgages must meet the ability-to-repay requirement and receive some protection from lawsuits. Also, fees can add up to no more than 3% of the total loan amount, and loan terms can be no more than 30-years. Based on a report from FHFA, some mortgages will be able to become exempt from these rules and may be able to be bought by Fannie and Freddie, due to the growing fears of qualified mortgage rules by some lenders.

An FHFA spokesperson stated, “Adoption of these new limitations by Fannie Mae and Freddie Mac is in keeping with FHFA’s goal of gradually contracting their market footprint and protecting borrowers and taxpayers.” This goal was founded after 2008, when both the mortgage financing giants were seized by the Federal government to put an end to the massive mortgage losses that devastated the market. The Dodd Frank Act helped to further the cause by creating the Consumer Financial Protection Bureau (CFPB) and making loans more affordable. The CFPB, has assisted to regulate lenders when determining whether borrowers can repay loans or not. One new rule which helps regulate this is that qualified borrowers must not have a debt that exceeds 43% of their income.

The final rules that the CFPB completed were in January of this year, which will take effect January 10, 2014.


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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