Is it really that hard? Yes. And no. And mostly yes again. And maybe it should be.
And since January 10 when the CFPB’s Qualified Mortgage rule took effect, it is definitely harder. So yes.
But there’s more to the story than that, and it doesn’t mean only Patsy Pays Perfect can qualify anymore.
The Qualified Mortgage rule has definitely put the squeeze on would-be homebuyers seeking a mortgage. People with lower income, the self-employed, those with credit scores on the margin, and people whose income comes from tips, bonuses or other harder to document sources are definitely being are all facing an uphill battle.
Industry analysts say that anywhere from 10% on the low side to 20% on the high side of people who have a mortgage now would not qualify for a mortgage under today’s rules.
But the rules and standards for getting a mortgage were already tightening long before the CFPB put their screws to it. In fact, the industry had largely self-corrected – as if it had a choice – long before Washington put it in ink with heightened documentation and tighter standards.
Mortgage applications, the first step in the mortgage process, have been down this year almost consistently.