How The Dodd-Frank Act May Change The Type Of Mortgage You Can Get

One key element of the Dodd-Frank Wall Street Reform and Consumer Protection Act is the Mortgage Reform and Anti-Predatory Lending Act. Aimed at protecting consumers and ensuring we never have to weather another housing meltdown this legislation imposes several restrictions on mortgage lenders and the types of loans they can offer.

One such restriction is that lenders must keep five percent of the mortgages they make on their own books for any loans that are not "qualified mortgages." Qualified mortgages, essentially plain-vanilla, less risky loans, can be fully sold to investors on the secondary market. This will quickly make it much riskier for lenders to offer loans that aren't qualified mortgages, and therefore lead to them becoming more expensive and tougher to come by for consumers.