Regulations, Verifcations, & Complications

Mortgage and Lending with Guaranty Bank and Trust Co. NMLS #595131

Over the past two years the face of the mortgage industry has changed much like the Picture of Dorian Gray.  A swarm of regulation proposals that is still buzzing today has affected lenders, appraisers, real estate agents and customers.  With more regulations to come it will only be harder for customers to get a mortgage.  More verification, more paperwork, more compliance can only equal one thing to the consumer:  Higher Cost.  I heard a good summation of what the government and regulatory agencies are telling the banks-

One one hand you have Washington saying, "Lend More Money!"  then on the other hand you have the regulatory agencies saying, "Don't make that loan!"  Now, in mid sentence, the guys from Washington sign legislation to create another regulatory agency that will only further hamper bank lending.  This is a perfect example of how actions are louder than words.

Let's take the residential lending market into consideration.  During the Clinton administration Barney Frank and Andrew Cuomo were at the forefront of LOOSENING the lending standards which enabled lesser qualified individuals obtain home loans.  Many of those same individuals have contributed to the rising foreclosure crisis.  Now both Frank and Cuomo are on the forefront of TIGHTENING regulation to restrict lending but take none of the blame for contributing to the mortgage meltdown. 

To me it seems like a tug of war where each entity has one hand on each side of the rope. The rope is made up of all the real estate professionals and the consumer and we are being stretched thin.  Which side will win or will it just be pulled apart?



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Eddie Reed


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