The new guidelines announced by the CFPB may very well signal an end to Adjustable Rate Mortgages in the residential lending environment. I have never been a huge originator of ARM loans but every now and then they are the perfect tool for a borrower to use.

However, with the changes, although ARM products are not banned or outlawed, the class they fall in will make lenders underwrite them to such a degree that very few people who need the loan will be able to qualify for them. The reason is that the CFPB seems to indicate that if this class of loans go bad, even if it solely because the lender mismanaged their money, lenders could potentially still be on the hook.

This type of environment is not going to make loans easier to get but harder. The end result could very well be the end of adjustable rate mortgages. If you have any questions or comments, feel free to contact me a http://www.mortgageloansofamerica.com or http://www.omahamortgageonline.com.