CPFB has issued new rules for qualified mortgages. Mercatus and others (more) are crying foul, saying the rules are too onerous and restrict the types of mortgage products that can be offered with no good reason. As far as I can tell, banks and lenders are still allowed to
offer whichever mortgage products they like. However, for these loans to be
considered "qualified mortgages," they must comply with the new
rules. In other words, for the lenders to qualify for liability protections (a de facto guarantee from the government), they need to follow the rules. Not sure how
this is a bad thing. Lenders should not be making loans that they believe
cannot be repaid. If the rules are too onerous, than it should still be
profitable for lenders to make loans and simply internalize the risk. Isn't
this what the free market is all about??
