New rules for mortgages

Under the Fed’s new rules for mortgages, I would currently not own a home. The Fed is banning no-doc loans, also known in various forms as stated income loans or no income verification loans. I used such a loan to buy my house, and as the owner of a small business I had no other easy option. While these loans have frequently been lumped into the subprime mess, I did not actually pay a higher rate on my no income verification loan.

Perhaps new rules will allow business owners to prove cash flow through bank statements, or allow banks to consider the indirect evidence of always being timely with state and federal tax payments, payroll obligations, and other serious fiduciary obligations. Perhaps down payments and equity levels and debt ratios will be a considered factor. But I suspect that the dream of home ownership just moved out of reach for another segment of our society.