By now, all REALTORS have heard about the Consumer Finance Protection Bureau (CFPB). It was established by the Dodd-Frank Act and at present time is overseen by….no one, not even Congress. We’ve heard changes take effect August 1, 2015 and enforcement begins aggressively on the same day. We know that the National Association of REALTORS and some members of Congress have asked for a grace period to allow lenders and title companies to adjust to the new rules and procedures. During the proposed grace period no penalties would be assessed for mistakes caused by the learning curve. CFPB has said, in no uncertain terms, “NO”. There will be no grace period. Enforcement begins immediately and completely.
Everything about the Dodd-Frank Act has been a perfect example of the old saying, “The road to hell is paved with good intentions.” This legislation was written with the best of intentions, to protect consumers. However, everything about it makes the process harder on consumers. Rules that have put in place to encourage the consumer to shop their mortgage loans are so cumbersome that most borrowers will only want to go through it once. Therefore, less shopping. The days of a consumer asking a lender what price range they can qualify for and getting an estimate of what that payment will be are gone. A consumer now must identify and contract for a specific property before they can get a loan estimate. I feel confident that we will find a way to work with this and help the consumer accomplish their goals. But wouldn’t it be great if Congress were helping us help the consumer?
All pieces of legislation have a number of hands in the creation pot. There’s no way for me to know who was influential in the writing of this legislation. It is easy to see who was not. No one who works with consumers on a regular basis to find a home and choose a mortgage could have possibly had any input in this legislation. After all, there are politics involved and those people are busy working with the consumers instead of playing politics to get on these committees.
Let me be clear. Dodd-Frank will not be the end of the world. We will work through it and deal with the CFPB and hopefully some good will come of it. Closings are going to take longer than they have in the past. Those who can may decide to pay cash instead of hassling with a mortgage. Those with less than the patience of Job may just rent. Hopefully most people will adjust and home ownership will grow in these United States. The free market system is an amazing thing. Let’s keep it free and watch our economy flourish.
leighyork 