Long Island Law Firm Explains Impact of New Lending Regulations on Home Buyers Roe Taroff Taitz and Portman Says Home Buyers Should Expect Big Changes this Year Share with Twitter Share with LinkedIn Share with Repost.us Roe Taroff Taitz and Portman, LLP. (PRNewsFoto/Roe Taroff Taitz and Portman, LLP) Roe Taroff Taitz and Portman, LLP. (PRNewsFoto/Roe Taroff Taitz and Portman, LLP) BOHEMIA, N.Y., March 19, 2014 /PRNewswire/ -- When it comes to buying a home, consumers need to be prepared for changes affecting the loan qualification process in 2014, says Christine Perrucci Smith, Esq., an associate with the Long Island Law Firm of Roe Taroff Taitz and Portman, LLP. As always, consumers must conduct due diligence ahead of time and understand what will be expected of them in order to qualify for financing prior to signing the Contract of Sale. Smith has identified changes that are being implemented this year and preparing Long Island home buyers for what to expect when trying to obtain financing for a mortgage. (Logo: photos.prnewswire/prnh/20140319/NY85844LOGO) Today, consumers are impacted by new regulations in the lending industry that began taking shape when the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act charged the Consumer Financial Protection Bureau (CFPB) with the authority to implement rules related to residential mortgages aimed at shielding borrowers (now labeled consumers) from the harmful lending practices that contributed to the recent financial crisis. For the past few years, the CFPB has been gathering information throughout the industry from consumers and lenders (now known under the rules as creditors) and on January 10, 2014, some of the CFPBs new rules made their debut. Whether you are soon to be a first-time home buyer or whether you consider yourself a seasoned veteran in the mortgage application process, the lender that you select will now be required to make a reasonable and good faith determination that you have a reasonable ability to repay the loan. (15 USC 1639c.) Of course, underwriting guidelines have always had to consider a consumers ability to repay, but the CFPBs new rules take this concept one step further by establishing a new set of criteria which, if met, designate a mortgage as a Qualified Mortgage (QM). Typically, a QM is a loan that will not (1) contain any excessive fees or points; (2) be an interest-only loan or a negative amortization loan; (3) contain a balloon feature; or (4) exceed a debt-to-income ratio of 43 percent. From a Lenders standpoint From a lenders standpoint, extending a QM over a non-QM may be preferable because a QM is presumed to have met the ability to repay requirement and, therefore, under the new rules, it is afforded certain protections from a consumer lawsuit. But what does this all mean for the consumer? From a Consumers Standpoint Consumers will need to be prepared. First, more than ever, consumers seeking mortgages today must be prepared to furnish lenders with documentation about their current sources of income, assets and other financial obligations. In addition, for those consumers who may only qualify for non-conforming loans, it may take some time to find a lender willing to take on the additional risk of extending a non-QM. The CFPB does not prohibit a lender from making a non-QM loan if it otherwise determines that the ability to repay rule is satisfied. However, the lender, among other things, would not be entitled to some of the safe harbor protections under the rules, should the consumer later default and commence an action against the lender for failure to comply with the CFPB rules. Second, under the new rules, consumers who later find themselves facing foreclosure may potentially have an additional defense to foreclosure if it is shown that the lender failed to properly verify the consumers ability to repay, for instance, by not considering the consumers living expenses in addition to mortgages and other debts. The purpose of the new rules is to encourage safer loans and eliminate risks for the consumers. Only time will tell, however, whether the CFPBs rules will negatively or positively impact the consumers home-buying experience and ability to obtain financing. As always, we recommend seeking the counsel of an experienced real estate attorney who is well-versed in the new regulations and who can provide guidance and support throughout the home buying process, says Smith. About Roe Taroff Taitz and Portman Roe Taroff Taitz and Portman, LLP provides a wide variety of legal services to Long Island. Our attorneys have served the residents of Suffolk County for more than two decades. Comprised of attorneys, legal assistants and administrative staff, the firm provides support at various levels of legal expertise. Our resources are available to both businesses and individuals looking for experienced legal representation. The firms primary areas of concentration include civil litigation, creditors rights law, trust and estates issues, estate planning, admiralty claims, business counseling and real estate matters. For more information, please call 631-475-4400 or visit RTTPLaw. Media Contact Monique Merhige Communication Strategy Group monique@gocsg 1-631-239-6335 SOURCE Roe Taroff Taitz and Portman, LLP RELATED LINKS RTTPLaw More by this Source Roe Taroff Taitz and Portman. (PRNewsFoto/Roe Taroff Taitz and Portman, LLP) A Tale of Two Transactions: Residential Real Estate Sales Contracts from the Buyer and Seller Perspectives Dec 18, 2013, 10:37 ET Six Things New York State Business Owners Should Know about the Uniform Commercial Code (UCC) Nov 05, 2013, 10:06 ET Lawyers from the Long Island law firm of Roe Taroff Taitz and Portman say, Whether your plan is to sell, donate or gift your artwork or collection to family and friends, knowledge of the laws involved is essential. (PRNewsFoto/Roe Taroff Taitz and Portman, LLP) Three Things Serious Artists or Collectors Should Know to Protect the Legacy of their Art Collections Oct 11, 2013, 10:05 ET View all news by Roe Taroff Taitz and Portman, LLP Featured Video Cape Cod® Launches Ridiculously Good Popcorn Journalists and Bloggers Visit PR Newswire for Journalists for releases, photos, ProfNet experts, and customized feeds just for Media. View and download archived video content distributed by MultiVu on The Digital Center. Share with Twitter Share with LinkedIn Next in Banking & Financial Services News Custom Packages Browse our custom packages or build your own to meet your unique communications needs. Start today. PR Newswire Membership Fill out a PR Newswire membership form or contact us at (888) 776-0942. Learn about PR Newswire services Request more information about PR Newswire products and services or call us at (888) 776-0942. Site Preview Close Site Preview View FullScreen
Posted on: Wed, 19 Mar 2014 17:09:35 +0000
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