New Mortgage Rules Rushed

New Mortgage Rules Rushed

Our market has been great this last year. While we aren’t fully recovered, we are on our way. How do we make sure we don’t’ experience the same crash we did just a few years ago?

You may have heard of the recent new rules regarding mortgage lending soon to be effective Jan. 1st of next year. The new rules are intended to prevent abuses such as banks lending to those who can’t repay or lending too much money in ratio to the real estate property.

The new Ability to Repay (ATR) Rules will require Qualified Mortgage (QM) loans to follow a specific template.

Sounds like a good idea, right? Bankers agree with the new regulations, they need more time, though, to get ready for the new rules.  In a recent article from the Omaha World Herald, Matthew Williams, chairman of the American Bankers Association, said banks need a delay of at least six months. If not, some banks will have to stop mortgage lending to ‘avoid legal problems and other issues’.

It may seem simple, enough; why do banks need more time? Software companies are still developing the programs needed to follow the new regulations. Once the programs are complete, personnel will have to be trained on how to use the system.

More than 50 banks from both Nebraska and Iowa signed a letter in July asking for a delay. Williams said he spoke with Valerie Jarrett, a senior adviser to President Obama about the new regulations and their need for a delay. He believes she understood the issue.

If you have questions about the new regulations and how they affect you in the buying process, call the Mortgage Doctor!

Why You Can’t Afford to Wait to Buy!

 Hey, guys! Thanks for joining me today!

If you’ve watched the news lately, you’ve probably heard about the increasing home prices and the increasing mortgage rates. In fact, home prices have increased by 12 percent since May of this year!

Why are prices increasing? According to economist Erik Johnson the “record-low rates, a lack of new homes on the market and years of pent up demand have been the driving forces behind the recent home price spike.”

That trend is expected to continue. What does that mean for you? The longer you wait to buy a home, the more it will cost you. You literally can’t afford to wait!

So, if you’re looking at homes on the market, give the mortgage doctor a call! I can help you get preapproved so you can take advantage of today’s market!