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Proposed Changes to Mortgage Rules – Good News for Consumers


Consumers who are shopping for new or refinanced mortgage loans could have an easier time comparing interest rate packages as early as next year. If adopted, the proposed Dodd-Frank Wall Street Reform and Consumer Protection Act will affect Santa Fe homeowners and home buyers, and most likely to their benefit. The new rule would make it easier for applicants to compare loan offerings and create a uniform standard for loan originator qualifications.

An overview of the proposal is available on the Consumer Financial Protection Bureau’s website, but below are a few key items that the proposed rule will address:

Points and Fees

  • Lenders will have to provide consumers a No-Point, No-Fee loan option, with no discount points or origination points or fees. This will make loan comparison shopping easier for the applicant.
  • Lenders will have to provide lower interest rates that directly correlate with the amount of upfront points or fees that consumers pay, should they choose to do so.

Lender qualification and compensation

  • The proposed rule also plans to better standardize the qualifications for loan originators, no matter which kind of institution they work for. Currently there are different training, background check and character requirements, depending on if the originator works with a bank, a mortgage broker or other institution.
  • There will be control on loan originator compensation in order to prevent steering practices, which pay the originator more for higher priced loans.

As the real estate market continues to recover, there will be an increase in mortgage loan applications. A simplified mortgage origination system and standardized lender requirements will be a benefit to all consumers if this new rule is adopted. Contact me if you are interested in starting your new home search in the Santa Fe area.


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