…and as witnessed over the past 20 years, nowhere is it more evident than in the mortgage industry. Much of it, as with any business, occurs because of the rapid and ever evolving technological advances making the process easier and more efficient.
Enter Government Regulation
But, as rapidly as it happens, the most change we’ve seen in the past years has come from government regulation. Hindsight is 20/20, of course, and looking back at the events leading up to 2008 (after years of loose lending guidelines) it’s pretty clear an adjustment was in order. And as we all know, adjust it did when the housing industry imploded and took the economy down with it. The government’s natural and predictable response to this was to pass a bill in an attempt to prevent it from happening again. Thus, was born the Dodd Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). This act represents the most comprehensive financial regulatory reform measures taken since the Great Depression.
Naturally, what followed was the creation of an agency tasked with “protecting consumers from unfair, deceptive and abusive financial practices”. So, the Consumer Financial Protection Bureau (“CFPB”) was created to begin what has become massive regulatory oversight of the financial institutions wrought with rumors about arbitrary audits and inconsistent enforcement guidelines and excessive fines. And because someone has to bear the cost associated with the implementation of additional government regulations and insuring their compliance, it has also increased the cost of getting a loan. How it all plays out for the consumer is a much more complex process littered with increased documentation, fraud prevention measures, quality control checks, and the list goes on.
Become a Certified Homebuyer
My point in sharing this information with you, however, is not meant to spread doubt into the minds of potential new homeowners. Actually, it’s just the opposite. While it’s true that the process and guidelines are more challenging than any time in history, rarely has there been a better time to buy. It’s become more critical to understand the importance of investigating buying options well in advance and working with professionals that have your best interest at heart. Getting a full approval prior to making an offer to purchase is so much more important today that it ever was in the past. We take this even a step further by offering what we call the Certified Homebuyer program.
Even if you are not in a position to buy now, we can work with you to determine exactly what needs to happen to achieve your goal of getting into a new house. One more important point I would like to make: The side benefit of the more intensive mortgage process is that underwriting quality is the highest it has ever been. So, in this environment, better loans will be made and fewer defaults will occur. Ultimately, it will insure the long-term stability of the housing market. Give us a call and let us help you explore your options…
Happy House Hunting!