Home Buyers Pay Price
for New Rules
It has barely been a couple of weeks since a nationwide changeover in mortgage and settlement procedures went into effect, but lenders and brokers are already charging that just about everything is taking longer and the costs to home buyers are increasing. As of Oct. 3, lenders and other agents were required to comply with an almost 1,900-page new rule book designed to improve transparency and accuracy in real estate and mortgage transactions for buyers and refinancers. Worry remains that the reformed process will draw out the typical time span between loan application and closing. However, what has received less focus are the impacts of longer timelines on how much consumers pay to close the deal -- increases that are just starting to become more evident. According to Mortgage Bankers Association chief economist Michael Fratantoni, the expenses added by the new settlement rules are in addition to a long series of federal regulatory changes in the last few years that have hiked the cost of originating a typical home loan from $4,500 to $7,000. "A lot of it is personnel, quality control, spending on new technology, and reprogramming systems," he says. As lenders and agents gain more experience in managing deadlines under the new rules, Fratantoni is hopeful that 30-day closings will become more common again.
From "Home Buyers Pay Price for New Rules"
Daily Herald (10/16/2015) Harney, Ken
It has barely been a couple of weeks since a nationwide changeover in mortgage and settlement procedures went into effect, but lenders and brokers are already charging that just about everything is taking longer and the costs to home buyers are increasing. As of Oct. 3, lenders and other agents were required to comply with an almost 1,900-page new rule book designed to improve transparency and accuracy in real estate and mortgage transactions for buyers and refinancers. Worry remains that the reformed process will draw out the typical time span between loan application and closing. However, what has received less focus are the impacts of longer timelines on how much consumers pay to close the deal -- increases that are just starting to become more evident. According to Mortgage Bankers Association chief economist Michael Fratantoni, the expenses added by the new settlement rules are in addition to a long series of federal regulatory changes in the last few years that have hiked the cost of originating a typical home loan from $4,500 to $7,000. "A lot of it is personnel, quality control, spending on new technology, and reprogramming systems," he says. As lenders and agents gain more experience in managing deadlines under the new rules, Fratantoni is hopeful that 30-day closings will become more common again.
From "Home Buyers Pay Price for New Rules"
Daily Herald (10/16/2015) Harney, Ken
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