Trend #5: New Mortgage and Servicing Rules
There is a series of new mortgage and servicing rules is in the process of being unveiled in early 2013. These rules will reshape the mortgage industry and could affect consumers, for better or worse, once they go into effect.
The mortgage industry has long claimed that many of the rules could restrict lending and the availability of capital, making mortgages much harder to get. Consumer advocates and other industry observers say the announcement of these will actually bring clarity and more certainty to the market, making loans actually easier to get. Many of the rules, which resulted from the Dodd-Frank Wall Street Reform and Consumer Protection Act, have been in the works for about two years.
The main rule released so far requires lenders to verify that a borrower has the ability to repay the loan when getting a mortgage. The rule was designed to protect borrowers from the types of risky loans that led to the housing crash. The regulation had to be crafted with caution so that it wouldn’t restrict lending and hurt the housing recovery.
“We got what we thought we were going to get, so I don’t expect any dramatic changes for most borrowers,” in terms of getting approved for loans, says Anthony Hutchinson, a senior policy representative at the National Association of Realtors.
Check out my mortgage and affordability calculators.