Arizona Mortgage Regs are Presidential

Mortgage Over-Regulation

Tonight’s Presidential debate covered all the important political topics from healthcare to foreign policy and beyond.  When the topic of government regulation came up I knew the words “Dodd/Frank” and “mortgage” were soon to follow.  After all, what better example of over-regulation is there right now than the Arizona mortgage industry.   Sure enough, Presidential candidate Governor Mitt Romney launched into the subject of mortgages.  He continued on criticizing parts of Dodd/Frank saying “have you tried to get a mortgage lately” with a pained expression on his face that seemed to say “its way more difficult than it should be.”

Regardless of one’s political opinion, if you have in fact tried to get a mortgage lately it is tough to argue with Gov Romney’s statement.  H0wever, it is important not to take this out of context.  Is it tough to qualify for a mortgage?  No, however one must actually qualify which some (mainly the unqualified) may interpret as difficult.  Does qualifying for a mortgage require a little more effort and paperwork gathering?  You betcha!  So while you be may asked to prove and document things that on the surface seem to have nothing to do with a home loan don’t get frustrated with your lender.  It is all part of the process of obtaining a home loan today.

While I am not claiming a political preference I have to admit that I was excited when the topic of mortgages came up in last night on stage.  The fact that this is a live topic in the debates is at least refreshing based on the fact that it says that someone is listening to us!  Regulation is one thing however severe over-regulation is something quite different.   While the mortgage market is in a “better” and more logical place than in years past (for example no longer can someone get a loan based on the fact that air flows through their lungs) we still need to find a nice even middle ground.  Repealing some of the over-regulation that was enforced AND more importantly is still yet to be enforced courtesy of Dodd/Frank would go a long way to normalize the mortgage market.

Mortgage Pendulum Swinging

The current state of the mortgage market is a perfect example of an over correction.   Lawmakers rightfully identified holes in the mortgage regulatory system as causes of the financial meltdown.  However, they inaccurately doled out rules and regs that have loan applicants providing a few extra layers of documents and loan officers fact checking a little more than what is prudent.  Hopefully this topic remains a political focus until some improvement is seen in the mortgage industry.

By Jeremy House
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  1. […] to also serve as your personal “pre-underwriter.”  An excellent loan officer knows loan guidelines better than a mortgage underwriter.  A loan officer that does is a key in experiencing a smooth […]

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