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New Mortgage Rules = Less Choice?

The rules are set up to restrict banks from lending to anyone whose debt payments would be more than 43-percent of their income.
(CNN) Good news for the economy could still be tough for you. With the Obama administration and Congress cracking down on banks and Wall Street, new laws that kick in early next year may make it harder for some people to get loans.

A new Commerce Department report says the sales of single family homes jumped a whopping 25-percent from September to October, and 22-percent since last year.

People may feel better about home-buying because the economy is bouncing back, but mortgage rates are about a point higher than they were just this spring.

So here's what you need to know when you start looking for a lender.

New laws require banks to make sure mortgages are affordable to consumers, and the rules will make compliance a lot tougher on some of the smaller banks. That may make some of those small banks drop out of the marketplace for mortgages altogether.

The rules are set up to restrict banks from lending to anyone whose debt payments would be more than 43-percent of their income.

The CEO of online mortgage lender, Loan Depot says banks will have to update their procedures and technology and retrain their staff. On top of that, small banks are hiring more lawyers to make sure they're compliant.

Those changes may not faze the Chinese however, whose economy is booming. Last year the Chinese bought $8.2 billion worth of American property -- with New York and Los Angeles topping their list.
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