New Changes in the Rules, May 2018

The 115th Congress (2017-2018) passed S. 2155, The Economic Growth, Regulatory Relief and Consumer Protection Act, which includes several critical regulatory provisions. Although most provisions are welcomed by most some leave others with different concerns such as

• SAFE Act amendments, which will provide mortgage loan officers with 120 days of transitional authority to originate when moving from a federal depository to a non-bank (or across state lines), and; While the MBA is for this other organization’s like FAMP and NAMB are not for it. Since this change allows lenders to grow both locally and in different markets the concerns are that, you may be dealing with a temporary license holder who does not have the competency to hold a license and is involved in transacting your loan.
• High Volatility Commercial Real Estate (HVCRE) reform, which effectively amends the banking agencies’ HVCRE rule, clarifying which acquisition, development or construction (ADC) loans are subject to a higher HVCRE risk weight, and aligns the rule with reasonable and responsible ADC lending practices. However, one must remember each state still may have in place regulations that are more restrictive.

In addition, the bill incorporates several other parts welcomed by all in the industry:

• Reforms to the VA Interest Rate Reduction Refinance Loan (VAIRRRL) program to protect veterans, service members and surviving spouses and reduce excessively fast prepays which have adversely impacted FHA/VA rates. As a Veteran myself I am very happy to see this. It also includes in (Sec. 313) The bill amends the Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012 to make permanent the one-year grace period during which a servicemember is protected from foreclosure after leaving military service. I couldn’t imagine a family losing a love one in combat or having been discharged after years of service and needing time to adjust and fine work only to be foreclosed on shortly afterwards.
• Language to address problems with TRID which will eliminate CD re-disclosure when rates go down and direct the BCFP to provide written guidance in other areas of confusion. This has been an ongoing problem for most loan originators, lenders, and consumers. Previously, in some cases consumers have received as many as 5 to 7 LE’s (loan Estimates) and CD’s (closing disclosures) combined during one transaction.

The Bill also includes provisions to help and protect seniors, first time home buyers, and co-signors of student loans but we wait to see how that shakes out through the process.

Its not uncommon to see new rules come out from time to time and like in the past these changes could take 12 to 18 months for us to really see the impact on todays market. In the period from 2013 through out 2015 the rules were changing rapidly and many could not keep up with all the changes causing confusion in the market place. Today most of these are welcome changes that many are ready for and we hope to see many good things from this.

Asking questions, taking the time to properly prepare for your home purchase is extremely important, today to many people rush into a home purchase emotionally and unprepared. Get your facts, do it right and we will see you at a happy closing table.