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The CFPB’s new rules on qualified mortgages could encourage riskier loans while protecting lenders from litigation under a safe harbors loophole, reports BankCreditNews.
The qualified mortgage (QM) rules only address debt-to-income ratios, and sets the maximum debit-to-income ratio at 43 percent. Federal Reserve data, however, indicates that the debt-to-income ratio is not a particularly relevant factor compared to credit history, loan type and loan-to-value.
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