Fed Approves New Mortgage Rules for Idiots

Is it just me or are these basically to prevent people from making stupid choices?

Here they are:

The final rule adds four key protections for a newly defined category of “higher-priced mortgage loans” secured by a consumer’s principal dwelling. For loans in this category, these protections will:

* Prohibit a lender from making a loan without regard to borrowers’ ability to repay the loan from income and assets other than the home’s value. A lender complies, in part, by assessing repayment ability based on the highest scheduled payment in the first seven years of the loan. To show that a lender violated this prohibition, a borrower does not need to demonstrate that it is part of a “pattern or practice.”
* Require creditors to verify the income and assets they rely upon to determine repayment ability.
* Ban any prepayment penalty if the payment can change in the initial four years. For other higher-priced loans, a prepayment penalty period cannot last for more than two years. This rule is substantially more restrictive than originally proposed.
* Require creditors to establish escrow accounts for property taxes and homeowner’s insurance for all first-lien mortgage loans.

Full release:

I mean, if you are buying a house without the ability to pay for it or lending money to someone without verifying their ability to pay, I’m sorry but you deserve what you get. Why not put corks on the end of all forks to stop people from poking themselves in the eye. Come on guys…..

Disclosure (“none” means no position):

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