Lenders are expected to continue lending outside the guidelines in some cases. For example, jumbo mortgages — those too big for purchase by Fannie and Freddie — are often written to affluent borrowers who for a variety of reasons choose to pay interest only for a period of time. There's no reason that practice should stop, senior consumer bureau officials said.
Lenders will be given a year to phase in compliance with the new rules. Some question certain limits imposed by the regulations, such as limits of 3% on points and fees that borrowers could be charged upfront, and the 43% cap on total debt payments.
The 3% fee limit would be hard to meet in some cases, said the mortgage trade group's Still.
Laguna Beach mortgage broker Richard Cirelli said that the debt ratio could pose problems, especially in expensive real estate markets.
"Capping the debt limit at 43% is going to create some problems," Cirelli said. "Especially for first-time buyers in California. It's still pretty expensive here."