Friday
Nov222013

Final Closing Disclosure Rule released by CFPB

Earlier this week, the Consumer Financial Protection Bureau (CFPB) published its final rule concerning the creation of Integrated Mortgage Disclosures, which combine the disclosures consumers receive under the Truth-in-Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).  The final rule includes new forms that will be used on virtually every transaction involving a mortgage loan originated and closed after August 1st, 2015. This new Rule is 1888 pages long.

In the coming months, Minor, Bell & Neal will be providing information concerning the new rules.  In the meantime, please click the following links to view the new Loan Estimate and Closing Disclosure forms.   These new forms will replace the TILA Disclosure, Good Faith Estimate (GFE) and HUD-1 Settlement Statement on nearly every residential sale or refinance after August 1, 2015.  Additional information can be found at: www.consumerfinance.gov

Monday
Sep162013

Lenders Now Unabashed in Their Demands for Detailed Documentation

Borrowers should be prepared to provide massive amounts of data to their mortgage lender when applying for a loan.  Expect to provide documentation concerning pending lawsuits, divorces and gaps in employment. 

Tax returns, W2s, and pay stubs may suffice to document income for many borrowers. But those who rely heavily on bonuses and commissions will probably have to verify a history of that income. Borrowers on disability may have to prove that they’re entitled to receive it.  If you have irregular or large deposits expect to have to explain the reason, and, under new underwriting rules adopted by the Consumer Financial Protection Bureau, borrowers who are counting alimony and/or child-support payments as income will likely have to show a year’s worth of canceled checks and a copy of the divorce decree.

There is of course a limit to how much personal probing lenders can do — federal law prohibits, for example, questions about whether an applicant is pregnant. But even applicants with pristine credit should expect extensive questioning about their finances.  Where loan officers and underwriters sometimes cross the line is in asking women about their child-bearing plans and whether they plan to return to work.

Wednesday
Jun262013

Fannie & Freddie to be Replaced?

Tennessee Senator Bob Corker introduced legislation Tuesday to replace mortgage finance giants Fannie Mae and Freddie Mac with a new government agency.

Since the 2008, Fannie, Freddie and other government-backed agencies have insured nearly 90 percent of new mortgages. While that has made home loans widely available despite the financial upheaval, it means taxpayers are at risk if homeowners default on their loans.

Corker has proposed that a borrower would either have to put 20 percent down to get a government-backed loan, or, if the borrower put down less money, would have to pay for mortgage insurance to make up the difference.  Under this plan the government would create a new single agency, modeled after the FDIC to insure these mortgages.

This proposal is similar to the way mortgages were made before the Savings and Loan Crisis and is modeled after the way most mortgage loans are made in many other countries.

But the way the government structures the loss and capital requirements could make it more difficult for borrowers to get a home loan, or more importantly could drive up the costs for loans.  But the restructure is needed and this bill will provide a way to begin the conversation.

Wednesday
Oct242012

Housing Inventory Continues to Move Down

The Wall Street Journal reports that the number of homes for sale in September dropped by 2.2% from August, by 17.8% from last year, and by 34.3% from two years ago.

Inventories have been falling amid stronger demand from home buyers, which are helping to firm up prices. The decline in inventory has frustrated home buyers who are not able to bid down prices for the first time in a long time.  This inventory decline is helping sellers who are now moving their houses at a slighter faster pace. 

Additionally the Census Bureau said that housing starts rose a remarkable 15 percent in September, to their highest rate since July 2008. Analysts had forecast a 2.7 percent gain. The number of housing permits also rose at a double-digit rate, 11.6 percent, compared with the 1.1 percent forecasters were predicting.

This latest news has prompted more and more economists to state that the housing industry has finally bounced off the bottom and that the market is indeed rebounding.

Monday
Oct012012

Home Prices May Not Return Until 2023

CNN Money reports today that the severe decline in home prices during the last 4 years may mean some homeowners who bought at the peak may never get their money back.  Housing is bouncing back, but it has a long way to go.

U.S. home prices have dropped by a third from the start of 2007 to the start of 2012.  Forecasters are predicting that the average pricing for housing will increase 3.7% a year for the next five years. At that forecasted growth rate, the national average high from 2007 would not be hit again until 2023

And for some areas like the metro Dalton area it could take even longer.