Just when you think you have this whole "Let's Get A Mortgage" Thing down...Changes have taken effect, making everyone's job, especially the Buyers...A Little Harder...these changes will no doubt help insure that people looking to buy, are truly Ready, Willing & Able...BUT...with the added layers of protection...comes true importance of having Mortgage Consultants and Real Estate Agents whom are experienced to help you through the process.
We have seen many changes to the lending process and the associated laws and rules that have gone into effect. As if there haven’t been enough, already on January 10, 2014, several new lending Rules have taken effect as a result of the Dodd-Frank Wall Street Reform and Protection Act. Here are the key ones to watch:
(1) Qualified Mortgage (QM) Rule - purpose is to reduce risk in the lending industry by imposing limits on risky loan terms such as interest-only and negative amortization as well as tightening underwriting standards.
(2) Ability to Repay (ATR) Rule - purpose is to protect consumers from obtaining loans that they cannot afford by requiring documentation and proof of income and assets. While you would think that lenders would do this anyway, the housing bubble and market crash were the result of lenders dropping verifications in order to make more loans.
(3) Qualified Residential Mortgage (QRM) Rule - Similar to the QM Rule, the purpose of QRM is to improve the quality of loans being sold on the secondary mortgage market.
For a good analysis of these changes, see Brandon Cornett’s article for the Home Buying Institute:New Mortgage Rules and Other Changes Coming in 2014.
As new information comes available, we will keep you informed about changes and how they may effect you or people you care about. If you have any questions, please drop us an email or give us a call. We are your Charlotte Mortgage & Real Estate Specialists.
Until Next Week...
Melissa Polce-Libutti, RE Broker, Allen Tate 704-450-4335
Gabe Libutti, Mortgage Manager, McLean Mortgage, 704-450-2518