The Consumer Financial Protection Bureau announced it's new 'ability to repay' rule that sets guidelines for new mortgages, including limits on debt payments as a portion of income.
Nam Y. Huh/AP
A new federal rule issued Thursday aims to make the nation safe from mortgage meltdowns like the one that ravaged the economy in 2008.
It's called the "ability to repay" rule, setting guidelines to make sure mortgage borrowers generally will be able to afford the monthly payments when they buy a home.
At the rule's core is this: A borrower's monthly debt payments shouldn't exceed 43 percent of monthly income.
The measure is being announced at a time when high-risk home loans are no longer the economy's big problem. The housing market is still struggling to recover from the massive boom and bust cycle that ended with the recession and financial crisis. Credit conditions today are relatively tight.
But this isn't a case of regulators simply fighting a previous war. Housing and credit tend to flow in cycles, and at some point the spirit of boom times and free-flowing loans could come back.