Chinese trade negotiators suddenly canceled a visit to meet U.S. farmers after they wrapped up trade talks in Washington this week.Marketsread more
The Pentagon will deploy U.S. forces to the Middle East on the heels of the attack on Saudi Arabian oil facilities, United States Secretary of Defense Mark Esper announced...Defenseread more
President Trump also said he is "not looking for a partial deal" with Beijing, moving away from his suggestion last week that he would consider an "interim deal."Politicsread more
Progress on trade talks will determine how far market will move above new highs.Trader Talk with Bob Pisaniread more
"Sure, the trade war's taking its toll on business ... it's just not taking its toll where it was supposed to," Jim Cramer says.Mad Money with Jim Cramerread more
Joe Biden called on President Donald Trump Friday to release the transcript of a call with a foreign leader that is the subject of a whistleblower complaint. Biden described...Politicsread more
For investors taking a breather from the chaos in August, buckle up as the market is about go crazy again, Goldman Sachs warned.Marketsread more
Palantir Technologies is targeting a valuation of at least $26 billion in a private fundraising round, the first for the Peter Thiel-backed data analytics startup in four...Wall Streetread more
Michael Pack, a conservative filmmaker linked to Steve Bannon, saw at least $1.6 million in donations from his nonprofit sent into the coffers of his independent production...Politicsread more
The New England Patriots released Antonio Brown just 11 days after signing the wide receiver. The NFL Super Bowl champion team initially had kept him in the face of a rape...Sportsread more
A tour bus carrying Chinese-speaking tourists crashed near a national park in southern Utah, killing at least four people and critically injuring up to 15 others, authorities...U.S. Newsread more
Getting a mortgage from a community bank or credit union could become easier, under a provision included in a banking regulatory bill under consideration in the Senate.
In simple terms, the changes would let smaller institutions — those with up to $10 billion in assets — offer mortgages that are not subject to some of the strictest federal underwriting requirements, as long as they meet certain other conditions.
"Where it likely will make a bigger difference is in rural areas, where big lenders don't necessarily operate," said Richard Andreano, a partner with law firm Ballard Spahr in Washington and head of its mortgage banking group. "It can be harder to get a mortgage in those places."
Following the financial meltdown that rocked the U.S. economy a decade ago, Congress enacted a variety of regulations in the sweeping Dodd-Frank Act of 2010 to better protect consumers from risky mortgages. Loans that were little understood or that ended up being unaffordable contributed to millions of homeowners losing their homes to foreclosure.
One of the things implemented by Dodd-Frank was the creation of a "qualified mortgage." Basically, if lenders meet a variety of strict guidelines — such as ensuring a borrower's loan is no more than 43 percent of their income — they get legal protection if a consumer later makes a claim that they were sold an inappropriate mortgage.
The Senate bill now under consideration (S. 2155) would let those smaller banks and credit unions still qualify for those legal protections without meeting all of the requirements that typically go with underwriting qualified mortgages.
However, the bill would still require them to assess the borrower's financial resources and debt as part of the underwriting process.
The loan also could not be interest-only or one whose balance could grow over time (so-called negative amortization). Those types of loans proliferated leading up to the mortgage crisis and contributed to homeowners' inability to keep up with their payments.
The lender also would be required to keep the mortgage in its own portfolio instead of selling it to investors. That would mean the risk remains with the bank.
Nevertheless, consumer advocates worry that reduced regulation could allow lenders to put borrowers in inappropriate mortgages while protecting the lender from legal recourse.
"This opens up a window for the return of some of the reckless financial practices that caused the crisis," said Yana Miles, senior legislative counsel for the Center for Responsible Lending.
Part of the problem with the mortgage crisis, however, was that some lenders sold mortgages with little or no effort to ensure the borrower could actually afford the loan. And once that loan was resold on the secondary market to investors, the originator no longer retained the risk.
To banking industry insiders, the bill's requirement for the bank to hold onto the loan will help prevent the type of abuse that consumer advocates fear.
"The bank will have done its due diligence. They are the one holding the loan and it will directly impact their bottom line," said Joe Pigg, senior vice president of mortgage finance for the American Bankers Association. "If they hold on to … the credit risk, they probably underwrote the loan very carefully."
While the Senate bill is expected to clear the upper chamber in the next several days with some bipartisan support, it would still need to get approval by the House before it could be sent to President Trump and signed into law.
More from Personal Finance:
Are you considering an adjustable rate mortgage? Here are the pros and cons
Senate banking bill would make credit freezes free
Student loan borrowers could get new flexibility under Senate bill