Should Buyers with stressed credit get residential mortgages?

Consumer Financial Protection Bureau (CFPB) wants to limit the “back-end” ratio on loans to 43 percent of total income.

National Association of Realtors (NAR) is lobbying against a range of new regulations including this limit.  NAR argues all the new regulations will restrict the flow of credit to prospective home buyers.

I agree with CFPB on the income cap issue as long as “income” is not loosely defined and some form of responsible lending exists – some form of limit on bad loans will only make people wait until they can afford the good loans and be good risks.

What do you think – should there be a reasonable limit – and what should that limit be?


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