‘Sweeping New Restrictions On Lenders And Buyers’

The Consumer Financial Protection Bureau is made up of unelected bureaucrats, but that isn’t stopping them from implementing what The Hill calls “sweeping new restrictions on lenders and buyers.” Not all of the restrictions are bad, and would be entirely unnecessary if not for the progressive politicians meddling in the mortgage market and forcing banks to make bad loans.

Housing rules unveiled by the administration’s new consumer watchdog agency on Thursday would insert the government into the housing market in a manner unseen for decades.

The set of regulations unveiled by the 18-month-old Consumer Finance Protection Bureau (CFPB) will impose sweeping new restrictions on lenders and borrowers, potentially making it more difficult for would-be homeowners, especially in pricier markets like New York, California and Washington, D.C.

The rules, required by the Dodd-Frank financial regulation bill, force banks to verify borrowers’ finances and prohibit so-called “no-doc” loans that became commonplace during the late 1990s and early 2000s. Also banned is the practice of using deceptive teaser interest rates that allowed lenders to mask the true costs and qualify borrowers who would not otherwise be eligible. (Read More)

Ed Morrissey weighed in, and he’s not exactly jumping for joy.

Hmm — completely rewrite history, much? By all means, let’s simply gloss over the fact that the federal government’s policies largely and directly incentivized financial institutions to engage in the type of behavior they did in the lead-up to the financial crisis, by just piling on more unchecked federal intrusion. Yes, financial institutions are certainly capable of acting like sharks — but who is it that has relentlessly abetted such shark-like behavior?

No matter what it is the munificent federal government claims to be “protecting” us from, I find the noblesse oblige of these moral-political busybodies much more terrifying than the private-sector profit motive. We’ll see how this plays out:

Bankers and consumer advocates called the Consumer Financial Protection Bureau’s new rules on mortgages a good start but each leveled criticisms of the new regulations at a hearing in Baltimore on Thursday.

Banking industry representatives and credit union officials each said they are concerned that new regulations from the CFPB could hamper their ability to make more home loans. Consumer groups, on the other hand, said the rules don’t go far enough in protecting consumers from being steered into mortgages they can’t afford.

Yeah, we’ll see. Who knows what other rules they’ve rammed in there under the guise of protecting us.

Don’t you just love the way these politicians operate? They make a huge expensive mess of things, then pass massive legislation and create new bureaucracies to deal with the huge messes they created in the first place?