One of the biggest changes in 2015 came in October. The Consumer Finance Protection Bureau (CFPB) delayed the start of TRID (TILA-RESPA Integrated Disclosure) from August to October stating administrative delays. TRID changed the way mortgage information is disclosed. The Loan Estimate replaced the Good Faith Estimate and the Closing Disclosure replaced the HUD at closing. The new forms do display information better and the LE does give the borrower the numbers that they will need at closing. The old GFE did not tell the borrowers how much money you would actually need at closing. The biggest change with the new forms is that the Closing Disclosure has to be signed by the borrower at least three days prior to closing. If it is not signed and back to the lender in time, the closing has to be delayed. It has helped slow down the delays on the day of closing- now we have the rush to get the CD out in time to get it signed and returned by the borrower! Once we have more time with the new forms, it will help the last minute rush but there is more to be done before closing and so there have been some delays with the new forms.
In December the Fed decided to raise interest rates by .25% – first time in about 9 years! This will continue into 2016 with more rate increases expected. The Fed still wants to keep rates low, but is trying to make sure they keep inflation in line.
An appraiser shortage was expected in 2015 and may continue into 2016. An aging appraiser demographic and outdated certification requirements has hurt the number of appraisers, especially in rural areas. This should get better going into 2017 as industry advocates are lobbying for changes to the certification requirements.
The CFPB and Department of Justice are watching- both CFPB and DOJ have levied fines on lenders. Many lenders are raising credit score requirements on FHA loans and this is part of the reason. There are some big banks that have backed out of FHA loans due to some enforcement actions by both the CFPB and the DOJ.
Housing groups had predicted a steep rise in foreclosures and evictions after the Protecting Tenants in Foreclosure Act expired at the end of 2014, but due to improved economic conditions, foreclosures actually decreased.
What will 2016 bring? We expect interest rates to increase, home prices may stabilize- partly due to increasing interest rates. There is discussion about relaxed lending guidelines. We'll see what happens as we move into 2016!
I hope everyone has a very Happy New Year!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc, An Equal Housing Lender, NMLS#150953 - Email - Website
