Changes to Mortgage Laws - Again!

There has been a flurry of legislation in the past 2 years that has greatly changed the environment in which we all do business.  Some good, some bad and some we are still attempting to sort out.  I would say that rather than take a negative stance on the legislation and whining about how it is effecting my business and making my life more difficult, instead I am thankful.  I am thankful that there are more regulators out there to 'catch the bad guys'.  I am thankful that there are fewer 'bait and switch' loan officers out there every day.  I bet there will be considerably fewer now that MDIA has gone into effect.  I am thankful to work in an industry filled with other professionals that care about the consumers right to 'a fair deal'.  I am thankful to be able to assist people every day through the process of financing a home.

I think the National Mortgage Licensing System has been a long time coming.  Prior to this some states didn't have ANY liscensing or education requirements.  I agree with the new requirement to deny licenses to people that are felons or that are involved in crimes involving fraud or theft.  We don't need these people assisting borrowers in what for many will be the largest financial transactions of their lives.  Any Realtors out there reading this will be relieved to know that Loan Officers are now required to submit finger prints for a federal background check (sound familiar?).  As your peer why wouldn't you want us to be held to the same standards!  I also love that if you have had your license revoked by one state you are not eligible to be licensed as a loan officer in ANY state.  Makes sense to me!

MDIA (Mortgage Disclosure Improvement Act) isn't completly a new thing.  Loan officers have always been required to redisclose the Good Faith Estimate and Truth In Lending Statement to borrowers when there has been a change in the APR of .125%.  What MDIA does is keep that from happening 'at closing'.  Under MDIA borrowers are given a 3 day 'review period' from the time they are given the accurated TIL (within .125% APR of the actual closing numbers) until the loan may fund.  I have heard many people express frustration that this will delay closings on purchases and cause extra paperwork for loan officers.  The reality is that there is NO extra paperwork.  Redisclosing loan terms is already required under Regulation Z and has been for many many years.  The only time you should see a delay in closing is if there are last minute changes to fees.  Sometimes these can be title fees which are beyond the loan officers control.  I would think that any buyers agent would want there client to have a full understanding of what they are paying before they pay it.  I know I wouldn't want to buy a house, a car or anything else for that matter without first knowing the cost to me!  So remember this if you do have a delay for some reason.  Allow your buyer/borrower the time they deserve to fully review the documents and charges.  A couple of days in most cases will not be a life altering delay. 

There are many more regulations/laws that have gone into effect over that last couple of years but these two seem to be the hot topics lately.  I try to remind myself that these rules are all made with good intention.  When I feel frustrated I must remember that the consumer does not have the same experience and understanding of real estat finance matters that I do.  It is my job to afford them every possible opportunity to gain the knowledge and information they need to make an educated decision.  I think it is unfortunate that we have to force loan officers to do what is ethical and common sense tells us is in the best interest of our clients.  But here we are and I am thankful!