Mortgage Regulation Providing More Questions Than Answers
If you’re wondering what’s going to happen in the mortgage industry come January 1st, join the crowd! It has been a long time since I have been this confused. There has been more change in our industry in the last six months then I have seen in my 12 years in the industry. As mortgage brokers, the biggest change of all is potentially coming on January 1st,…RESPA reform and that dreaded new Good Faith Estimate. But a lot can change between now and then. There are many forces working to either delay it or re-think it. So, it is possible that after worrying ourselves sick, the whole thing ends up looking different than we think after all. Look at the Red Flag rule. It has been delayed 3 times so far this year.
To make matters more complicated, there is much left open to interpretation. The biggest unknown to me is who really is defined as a mortgage broker and therefore subject to these disclosure guidelines? If I read it correctly, any firm that is not planning on servicing their own loans is defined as a mortgage broker. This means many correspondent lenders, “net branches” and even mortgage bankers could be subject to these new disclosure rules. Many of these same firms are trying to recruit small mortgage brokers claiming to be able to skirt this very issue. What if they can’t?
For me personally, I had another issue that was on the top of my list as I was contemplating what my options were…I don’t have FHA and really need it at this point. It would not be a huge part of my business but I am still losing deals. Low and behold, this past week, FHA has proposed policy changes that would go into effect January 1st that essentially do away with an individual mortgage broker having to be approved by the FHA. Instead, As long as you are doing business with a lender that is approved, you would be able to originate the loan. If this is true, then that solves one large issue for me, and I’m sure many of you.
At this stage, it is prudent to be talking to as many possible people as you can. The best thing to do is to is consider as many options as possible and have a choice in mind that you can “hookup” with if the time comes where that is prudent. In the meantime, if you don’t really want to do anything different, I don’t see any big hurry. You have until the end of the year and most likely longer before we really know what the final outcome is going to be. Feel free to call me if you feel like talking!