2014 was a big year from a regulatory stand point. We saw some big changes hit from Dodd-Frank, which put the industry on its head for a few months in the beginning of the year and had the markets unsure of how to react. The changes last year focused on the borrower’s ability to repay. Specific guidelines were enacted setting maximum debt-to-income ratios and creating penalties which can be imposed for bad lending practices. Further, it gave borrowers the right to sue the lender if the loan is not suitable based on said guidelines.

But the lenders adjusted, the markets corrected, and the impacts were hardly felt by clients and the real estate market on the whole barely noticed. The hiccups largely happened in larger lending institutions which did not have the ability to update their policies as quickly as smaller mortgage banks which specialize in mortgages and lending. But by the summer, everyone was back up to speed.

Looking ahead to this year, I don’t see the same industry altering regulatory changes, but there will certainly be changes coming. In August, there will be new disclosure requirements. Instead of a TIL and RESPA, there will be one unified Loan Estimate and Closing Disclosure. This is supposed to lessen the amount of paper sent to clients and simply everything for borrowers. The verdict is still out on the efficacy of the whole thing, but it is sure to create a stir by midyear as lenders start to time out the switch over.

If you are looking to buy a home this year, I would recommend avoiding late July and early August, simply because there will be the possibility of issues with closings at that time. Instead, I would start working with a qualified mortgage officer now, so that he or she can guide you through the process this year.

If you have any questions about buying a house or how the regulatory changes might impact you, contact me. If you have anything to add about these or other regulatory changes next year, please leave a comment.