Debt-to-Income Ratio

Student Loan Payments To Affect Americans’ Homebuying Power

Posted on by TMN Editor
Student loan payments are set to resume this October, giving Americans yet another monthly bill to stress about, and the impact is expected to set in early. “It’s going to quickly reverse all the progress that was made during the repayment pause, especially for those who took out new debt in mortgages or auto loans where they had the financial room because they weren’t paying their student loans,” Laura Beamer, who researches higher education finance at the Jain Family Institute, told the New York Times. Monthly student loan bills before the pandemic came in between $200 and $299, a serious chunk of change that borrowers have not had to budget around. A report by the Federal Reserve found that about…

Industry Reacts To FHFA’s DTI Rule Change

Posted on by TMN Editor
The Federal Housing Finance Agency has rescinded a rule changing upfront fees based on borrowers’ debt-to-income ratios. If it had gone through, the policy would have created an adjustment for DTIs higher than 40% that Fannie Mae and Freddie Mac would acquire. Back in March, the agency delayed the implementation of these fees to talk it through with industry leaders, who largely opposed the move. One major concern was that small lenders would be hindered by compliance: disclosure laws require lenders to alert borrowers of pricing throughout the application process, but a borrower’s income and expenses can change dramatically throughout the loan procedure, requiring an unmanageable compliance burden. The Community Home Lenders Association argued against the adjustment at the time,…