Upcoming Changes With Mortgage Regulations
The looming changes in mortgage regulations on how mortgage loans are disclosed at the time of mortgage application and at the closing are sending the mortgage and real estate industry into a shift on how they do business as usual. Gone will be the days of last second closings and meeting a dead set deadline date. Now, there will be a mandatory free look provision that gives home buyers and refinanciers three days to look things over mortgage documents.
How New Mortgage Regulations Affect Consumers
These changes with new mortgage regulations will do a few things: One they will force everyone involved to communicate all fees and cost involved upfront. Last second charges can trigger either re-disclosure or mortgage lender cost if the fee falls in a bucket that cannot be raised one penny once it has been disclosed.
Mortgage rates, costs, and fees will go up: Now that mortgage lenders are 100% responsible for all closing figures, they will have to hedge their rising costs of mistakes, in-house processing, and mortgage loans that have to be re-locked.
Mortgage closing times will take longer. Some say up to 60 days to close on a mortgage loan, which mean longer waiting periods. Rush closings and fire sales will have no bearings on how fast they can turn unless the purchase is a cash deal. With cash real estate transactions, the new mortgage regulations do not apply.
Those not using the internet will have to wait three business longer on top of their waiting period of 3 days. This will lead to higher mortgage rates, higher costs, higher fees, and longer turn times.
Simultaneous mortgage closings will cease to exist. You will no longer be able to buy the same day you sell you current home. The coordination between two different transactions will make the likelihood of a same day sale challenging, and will force sellers to wait in a hotel for three days until a new one can close or longer assuming everything is perfect which it hardly ever is.
Eventually like all other changes, everyone will adapt. Those who don’t adapt to the new mortgage regulations and rules will suffer financially and exit the business. The consumer will ultimately pay more, wait longer, have more unnecessary paperwork but will at least be 100% aware of what they are getting into. It seems like every new mortgage regulations we get like the last one but regulators keep on implementing more and more mortgage regulations as time passes to benefit the public but it turns out that it does not benefit the consumer but hurts them instead and makes the already complex mortgage industry more confusing with unnecessary work which ultimately hurts the public due to the overhead mortgage lenders need to cover to enforce and comply with new mortgage regulations. At the end of the day, the consumer pays for this either by higher mortgage rates and/or higher costs and fees.
Mortgage Market News By Ron Granado
New Mortgage Regulations was written by Ron Granado of Plymouth Guaranty Corp. Ron Granado is a guest financial writer for Gustan Cho Associates and a veteran real estate and mortgage market expert. Ron Granado is sought by many real estate professionals such as real estate attorneys, real estate agents, mortgage professionals, and bankers for his extensive knowledge in compliance and industry regulations in the real estate and financial markets.